Executive Session

Floor Speech

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Mr. CONRAD. Mr. President, I rise in support of the confirmation of Mr. Bernanke to continue as Chairman of the Federal Reserve. I do so, acknowledging that he contributed to the crisis, but also recognizing that without his strong leadership the crisis might have become a conflagration.

How did we get to the brink of financial collapse? I might say to some of my colleagues, they should look in the mirror because they, too, contributed to the forming of the bubble. How? An overly loose fiscal policy under the control of the Congress and the administration.

The previous administration ran up massive deficits, doubled the debt. That is a loose fiscal policy. It was accompanied by a loose monetary policy after 9/11.

After 9/11, the Federal Reserve kept interest rates very low, flooded the system with money, and the combination of an overly loose fiscal policy and an overly loose monetary policy created the seed bed for bubbles to form. Indeed they did.

We didn't just have a housing bubble, we had an energy bubble--oil prices went to $100 a barrel. We had a commodity bubble--wheat went to more than $20 a bushel. These are examples and evidence of bubbles being formed. When you have an overly loose monetary policy and an overly loose fiscal policy, bubbles are going to form and ultimately bubbles burst. When they do, there is enormous economic wreckage. That is what has occurred here--all of it coupled with an era of deregulation.

Under the previous administration--and, yes, the Federal Reserve has responsibility here as well--there was too little regulation of major financial institutions and of major financial instruments. Trillions of dollars of derivative instruments were floating around the world unregulated, even unrecorded. Of course there was danger there.

Warren Buffett warned that derivatives constituted a nuclear time bomb hanging over the global economy. Ultimately the bubbles burst, and ultimately the economic wreckage built. Bernanke bears some responsibility for that, without doubt. But once the crisis developed he took charge in a way that is unprecedented. He took step after step to provide liquidity to this global economy to prevent and avert a collapse.

I believe when the history of this period is written, in terms of the response to the dangerous cloud hanging over this global economy, Bernanke will prove to have been one of the heroes of the piece. In instance after instance, he took unprecedented action to avert a collapse.

His academic study was the Great Depression.

He resolved as a young man to do everything he could to prevent any future collapse of that magnitude. He proved to be the right man at the right time. He deserves to be confirmed in this vote this afternoon. I ask my colleagues to please be judicious. Let's recognize that he made serious mistakes. Let's also admit the Congress and the administration, the previous administration, made very serious mistakes: overly loose fiscal policy, overly loose monetary policy, a lack of regulation, the creation of bubbles, bubbles that burst that created enormous wreckage. But Ben Bernanke helped avert a global financial collapse. I believe history will prove that is the truth.

I yield the floor.

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