Hero or Villain? Lawmakers Scrutinize Ben Bernanke's Record

Dec. 3, 2009— -- Federal Reserve Chairman Ben Bernanke today defended his record as chief of the central bank during the country's worst economic downturn in generations, but some members of Congress responded to his quest for a second term with opposition and skepticism.

"We did not – certainly not do a perfect job by any means," Bernanke said at a reconfirmation hearing before the Senate Banking Committee. "But I don't think we stand out as having done a worse job than other regulators."

While the majority of lawmakers on the panel expressed support for the Fed chief, others tore into the central bank boss, blasting him for failing to prevent the current crisis and then rescuing Wall Street but not Main Street.

"Your time as Fed chairman has been a failure," Sen. Jim Bunning, R-Ky., told Bernanke, adding, "I will do everything I can to stop your nomination."

Dubbing Bernanke "the definition of a moral hazard," Bunning noted, "Under your watch every one of the major banks failed or would have failed had you not bailed them out."

"The AIG bailout alone is reason enough to send you back to Princeton," Bunning added. (Bernanke was chairman of the economics department at Princeton University prior to being appointed Fed chief by President George W. Bush.)

Despite Bunning's harsh words, Bernanke received backing from the panel's chairman, Sen. Christopher Dodd, D-Conn. "I believe you've done a very good job in helping us avoid the kind of catastrophe that could have occurred in this country," Dodd said.

"You and the Federal Reserve deserve, in my view, praise for your acumen and gratitude for the role in preserving a far worse outcome than we might have otherwise seen and I believe that you deserve another term as chairman of the Federal Reserve."

But the Connecticut lawmaker also cited a litany of mistakes made by the central bank in the run-up to the recession, from lapses in consumer protection to lackadaisical oversight of Wall Street risk-taking.