Sen. Jim Bunning (R-KY) took a Louisville Slugger to Bernanke in the Fed Chairman reappointment hearings yesterday. The Hall of Fame baseball player opened by reminding Bernanke that he opposed him in 2005 and that he opposes him now. He ripped into him with line after line, but one stands out.
Bunning quoted Bernanke from his first reappointment hearing as saying: “In short, although vigilance is necessary, I believe the systemic risk inherent in the banking system is well-managed and well-controlled.”
Bunning followed that up with this tirade:
Now, if that statement was true and you had acted according to it, I might be supporting your nomination today. But since then, you have decided that just about every large bank, investment bank, insurance company, and even some industrial companies are too big to fail. Rather than making management, shareholders, and debt holders feel the consequences of their risk-taking, you bailed them out. In short, you are the definition of moral hazard.
Read the whole statement from Sen. Bunning here.