Ben Bernanke’s appearance on Capitol Hill begins at 10:00, and you can watch it online here at C-SPAN (Nobody cares enough anymore to embed it, it would seem). The question: Did Bernanke and Paulson abuse their power to force Bank of America (BAC) to swallow Merill Lynch, and did they then orchestrate a cover-up, to use the term of ranking member Darrell Issa.
You can read through some of the internal Fed emails here. As we’ve said, we’re not seeing the smoking gun, just yet.
While we wait for it to begin (it’s scheduled to start at 10:00, but they’re getting a late start), we’ll run down some of the background. First, there’s a lot of talk these days about Bernanke’s re-appointment. Second, the mainstream viewpoint, as seen on CNBC, is that these hearins are ridiculous, and dangerously destabilize the nascent recovery.
We’ll break in for highlights. Please use the comments as an open thread below.
10:05 The hearing begins with House Oversight Chair Edolphus Towns…
10:09 Ranking member Darrell Issa is talking now. As, you know, he’s the one who’s accused the Fed of engaging in a coverup, so we’ll see if he has the goods. For his part, Towns wasn’t particularly aggressive.
Ben Bernanke’s prepared statements are here.
10:16 Now it’s Kucinich talking. For what it’s worth, the market isn’t too worried at this point. Stocks are up.
10:22 And Bernanke’s starting. (He kind of sounds nervous and there are microphone troubles. This might be a tactic on Issa’s part to unnerve him!)
10:26 He really does sound a bit shaken up, while reading through his opening statements.
10:34 Towns going straight after Bernanke on whether he threatened to fire Lewis. He says no, he didn’t. As for early promises of monetary help, he says he only promised to work in good faith to ensure BofA’s survival.
10:40 Ben Bernanke just had to say “I don’t recollect…” for the first time, when asked by Darrell Issa about an email possibly making a threat to Lewis.
10:43 Issa really hounding Bernanke.
11:29 There’s been a lot of back-and-forth without traction, and a lot of “I don’t recollect” statements on Bernanke’s part, which sound terrible. The folks on CNBC think Bernanke’s doing great. Others on the internet who are less favourably disposed to the Fed Chair… not so much. Our gut still says that this goes away.
11:36 Kudlow: He’s outfoxed all of them.
11:52 Elijah Cummings, who does great at these hearings, is tearing into Bernanke about his view of Ken Lewis. He asked whether Bernanke regarded Ken Lewis as competent, but alas, CNBC’s feed cut out and we missed the answer.
11:59 Megan McArdle has this take on the whole thing :
I’m on the record as thinking Bernanke has done a pretty good job in a pretty scary crisis. Nothing I’ve heard recently has changed my mind on that. However, I have to say, watching his testimony to Congress today, I suspect that he’s not going to be reappointed when his term ends next year. Whatever happened between him and Paulson and Ken Lewis, he is now giving a very good impression of someone who is lying. And Congress wants someone to blame. Besides, firing Bernanke lets Obama portray all of the failures of this year as Bush errors in policy or appointment.
I think if he’s pushed out it will be a real pity, for several reasons. First, Bernanke really is the most superbly qualified economist out there to deal with this particular sort of crisis. But perhaps more importantly, regulatory uncertainty is not what we need now.