April 26, 2024

Political Memo: Fed Chairman Change Casts New Light on Bush Era

Although President Obama has been Mr. Bernanke’s partner in an effort to steer the economy through a financial crisis, deep recession and recovery, so was the man who put Mr. Bernanke in the job in the first place: Mr. Bush.

“Ben Bernanke, along with George Bush and Barack Obama, saved us from another Great Depression,” said Senator Charles E. Schumer, Democrat of New York, echoing the views of others in his party. “Twenty years from now, that’s what history will say about all three of them.”

That’s the same Mr. Schumer who in 2008 ripped Mr. Bush’s “disastrous course.”

It is a reminder that the administrations of all presidents, sometimes unpredictably, have tails that extend long past their terms in office. And it provides some encouragement for Mr. Obama as he seeks to leave a mark on the 21st century economic debate — even if he cannot fulfill his agenda before leaving office.

The catalog of Mr. Bush’s economic sins has long been an article of faith among Democrats: tax cuts for the rich that turned budget surpluses into deficits, widening income inequality, slow wage growth, a hands-off approach to regulation that ended with the crash of the housing market and Wall Street. And not just among Democrats: Mr. Bush limped out of office with only about one-third of Americans approving of his performance.

But the momentary snapshot that political rhetoric encapsulates is only part of any president’s story. Because of the Fed’s vast influence over the economy — rivaling or exceeding that of presidents — selecting a chairman may be the single most consequential economic decision a chief executive can make.

On the day in 2005 that he appointed Mr. Bernanke, an academic expert on the Depression, Mr. Bush noted the Fed chairman’s responsibility “for containing the risk that can arise in financial markets.”

Today, few question Mr. Bernanke’s success in helping contain the risks he confronted.

“On economic issues, Bush was not an ideologue,” said Mr. Schumer, who in 2006 led Senate Democrats to recapture the majority and roadblock the Republican president’s domestic agenda. “On his most important economic appointment, he showed who he was.”

Henry Paulson, Mr. Bush’s last Treasury secretary, praised Mr. Bernanke — reappointed by Mr. Obama in 2009 — for helping produce the “enormous accomplishment” of slow but steady economic growth for the last few years even as American consumers were “de-levering” themselves of debt. As the country nears the fifth anniversary of the financial crisis, Mr. Paulson said that Mr. Bush’s critics ignored the reality that the underlying causes of the crisis were decades in the making. He said that Mr. Bush deserved more credit than he has received for Mr. Bernanke and for resisting the partisan and ideological polarization of Washington when the two stared into the economic abyss.

“It’s a big part of his legacy,” Mr. Paulson said.

Over conservative resistance, Mr. Bush backed the bailout mechanisms for Wall Street and the auto industry that Mr. Obama later would put into effect. “He put the political considerations aside and approved taking actions that he knew would be very unpopular with his base,” Mr. Paulson said.

Still, there is no guarantee that Mr. Bush’s appointment of Mr. Bernanke will burnish the former president’s historical reputation, as veterans of President Jimmy Carter’s administration can ruefully attest. The former domestic policy adviser Stuart E. Eizenstat recalls that Mr. Carter appointed Paul Volcker as chairman of the Fed in 1979, knowing full well that the interest rate increases he planned to tame inflation would harm Mr. Carter’s re-election bid.

Article source: http://www.nytimes.com/2013/07/27/us/politics/fed-chairman-change-casts-new-light-on-bush-era.html?partner=rss&emc=rss

Under Fire, White House Pushes Media Shield Law

President Obama’s Senate liaison, Ed Pagano, on Wednesday morning called the office of Senator Charles E. Schumer, Democrat of New York, and asked him to reintroduce a version of a bill that he had pushed in 2009 called the Free Flow of Information Act, a White House official said.

The bill would create a federal media shield law, akin to ones most states already have, giving journalists some protections from penalties for refusing to identify confidential sources in federal law enforcement proceedings, and generally enabling journalists to ask a federal judge to quash subpoenas for their phone records.

Hours later, Attorney General Eric H. Holder Jr. appeared before the House Judiciary Committee for a hearing that covered a wide range of topics but repeatedly returned to the A.P. phone records. Lawmakers from both parties sought to grill him over why federal investigators secretly used a subpoena this year to obtain a broad swath of toll records — logs of calls sent and received — for several A.P. bureaus and reporters, without advance notice.

“These requests appear to be very broad and intersect important First Amendment protections,” said the committee’s chairman, Representative Robert W. Goodlatte, Republican of Virginia. “Any abridgment of the First Amendment right to the freedom of the press is very concerning.”

Mr. Holder, however, repeatedly noted that he had recused himself because the F.B.I. had interviewed him as one of the officials who knew the information that was leaked to The A.P., which is believed to be about the foiling of a bombing plot involving the Yemen branch of Al Qaeda in the spring of 2012. The decision to approve the subpoena was made by his deputy, James M. Cole.

“I was not the person who was involved in that decision,” he said.

That answer, versions of which he gave in response to multiple questions from Republicans about the leak investigation, did not satisfy committee members, several of whom said they wanted Mr. Cole to appear before the committee and answer questions. Mr. Holder, however, cautioned that since the investigation was continuing, Mr. Cole might not be able to discuss the issue.

Mr. Holder also said that he did not put his recusal in writing, which drew widespread criticism from the lawmakers. Later in the hearing, he said that he had decided to examine whether it would be a better policy to always record when he was transferring his powers to his deputy for a specific matter.

The top Democrat on the committee, Representative John Conyers of Michigan, noted that he had sponsored a version of the Free Flow of Information Act that passed the House twice when it was under Democratic control. He said he would reintroduce his version, too, and he said he hoped that Republicans — who until recently had called for more aggressive investigations of leaks — would support it.

The version the Obama administration is seeking to revive, however, is the one that was chiefly sponsored by Mr. Schumer, which was negotiated between the newspaper industry and the White House. It was approved by the Senate Judiciary Committee in a bipartisan 15-to-4 vote in December 2009. But while it was awaiting a floor vote in 2010, a furor over leaking arose after WikiLeaks began publishing archives of secret government documents, and the bill never received a vote.

In a statement confirming that he would reintroduce the legislation, Mr. Schumer referred to the controversy over the subpoena of A.P. calling records, saying: “This kind of law would balance national security needs against the public’s right to the free flow of information. At minimum, our bill would have ensured a fairer, more deliberate process in this case.”

It is not clear whether such a law would have changed the outcome of the subpoena involving The A.P.

The 2009 legislation would have created a presumption that when the government was seeking calling records from a telephone carrier, the news organization would be notified ahead of time, allowing it to fight the subpoena in court. But the bill would also have allowed the government to seek a 45-to-90-day delay in notification if a court determined that such notice would threaten the integrity of the investigation.

Under the bill, the scope of protection for reporters would vary according to whether it was a civil case, an ordinary criminal case or a national security case.

The greatest protection would be given to civil cases, in which litigants seeking to force reporters to testify or trying to obtain their calling information would be required to show why their need for the information outweighed the public’s interest in unfettered news gathering.

Ordinary criminal cases would work in a similar fashion, except the burden would be on the reporter seeking to quash the subpoena to show by a “clear and convincing” standard that the public interest in the free flow of information should prevail over the needs of law enforcement.

Cases involving the disclosure of classified information would be more heavily tilted toward the government. Judges could not quash a subpoena through a balancing test if prosecutors presented facts showing that the information sought might help prevent a terrorist attack or other acts likely to harm national security.

In his testimony, Mr. Holder said he supported Mr. Schumer’s bill.

“There should be a shield law with regard to the press’s ability to gather information and to disseminate it,” he said. “The focus should be on those people who break their oath and put the American people at risk, not reporters who gather this information.”

Article source: http://www.nytimes.com/2013/05/16/us/politics/under-fire-white-house-pushes-to-revive-media-shield-bill.html?partner=rss&emc=rss