Sen. Bob Corker argued with Federal Reserve Chairman Ben Bernanke Tuesday, calling Bernanke the “biggest dove since WWII” and suggesting leaders at the nation’s central bank had sought to stimulate a global currency war.
At one point, Bernanke responded to Corker by saying, “None of the things you have said [are] accurate.”
Bernanke visited Capitol Hill Tuesday to offer a report on monetary policy to the Senate Banking Committee, of which Corker is a member. The senator and former Chattanooga mayor, who has not shied away from his criticism of Bernanke and Fed policy in the past, asked the chairman if he had considered what would happen when the Fed eventually unwinds a bond-buying program geared at steadying the U.S. economy as recovery continues.
“I don’t think there’s any question you would be the biggest dove since World War II; I think that’s something you’re really proud of,” Corker said, suggesting Bernanke preferred low interest rates because inflationary impact on the economy would be minimal. “. [I’m] just wondering if you all talk in your meetings about the degrading effect that’s having on our society and how that’s basically punishing people who have done the right things.”
Bernanke defended his record as chairman, which began the same year Corker became a senator in 2006, stating he had the best inflation record of any chairman since World War II. Bernanke said the Fed was working on both sides of its mandate to ensure price stability and maximum employment to achieve a “stronger economy for everybody.”
“I don’t think there’s any degrading going on,” Bernanke said.
To view the entirety of Corker and Bernanke’s exchange, click here. Discussion begins at the 1:05:20 mark.
Tuesday afternoon, Corker’s office released a letter penned to Bernanke, which attempted to rectify their discussion.
Corker restated his question to the chairman, saying, “It seems we had a miscommunication.”
“If interest rates were to rise and your securities portfolio were marked to market, is it not possible that you could be rendered insolvent, at least on a balance-sheet basis?” Corker asked. “And if so, what kind of risk would that represent? What I would ultimately like to understand is the following: Do we have a serious policy problem brewing here, or is this simply an optics problem about which we should not be concerned?”