Toward the end of last week, I had a chance to speak with Senators Casey and Durbin, both of whom voted to re-confirm Bernanke for another four year term.

Durbin told me that when he spoke with the Fed Chair, Bernanke “did not tell me that he favored one over the other. I certainly would have taken note of that.” He also said that Bernanke told him the Fed is committed to transparency, up to the point of policy review. When it comes to policy, Durbin agreed with the Bernanke that the Fred needs to remain independent and insulated from politics.

Regarding consumer protection, Durbin told me that Bernanke claims that in recent years the Fed has had over 200 employees hard at work implementing consumer protections. Durbin said Bernanke would be better served if those efforts were better publicized.

The conversation with Senator Casey was a little more substantive. I got it started by asking that given 1) Bernanke’s said that he’s more concerned about being an inflation hawk than achieving maximum employment; 2) Bernanke has refused to weigh in regarding the wisdom of tax increases as a means of balancing the budget, saying it was a political decision… but… he was willing to say that entitlement programs are the logical place to look if we want to balance the nation’s books; and 3) he was a member of George Bush’s Council of Economic Advisors, manned the helm as the nation’s economy and financial system tip-toed along the edge of economic disaster… Why was Senator Casey still voting for him?

After Casey told me he’s voting for Bernanke, at least in part because he’s concerned about market reaction, our conversation turned toward transparency and accountability. In short, I wanted to know why we weren’t thinking about delaying the confirmation until some of the questions that Bernanke has worked so hard to avoid answering were resolved. Why not wait until the conclusion of an audit? Why not find out why Bernanke overruled his Board to bail out AIG? After all, if the Senate goes ahead and confirms an incompetent on the basis of inadequate information (and, one would imagine, largely self-serving information since Bernanke decided what to release and what to keep secret), the markets would be in a worse place tomorrow than they are today.

Section 2a. Monetary Policy Objectives
The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.
[12 USC 225a. As added by act of November 16, 1977 (91 Stat. 1387) and amended by acts of October 27, 1978 (92 Stat. 1897); Aug. 23, 1988 (102 Stat. 1375); and Dec. 27, 2000 (114 Stat. 3028).]

In black and white, that’s the mandate carried by the Chairman of the United States Federal Reserve, Ben Bernanke.  He, and others, may not like it, but until the law is changed, it is what it is.

And that’s what makes this exchange so remarkable:

Brad Delong:      Why haven’t you adopted a 3% per year inflation target?

Ben Bernanke:  The public’s understanding of the Federal Reserve’s commitment to price stability helps to anchor inflation expectations and enhances the effectiveness of monetary policy, thereby contributing to stability in both prices and economic activity. Indeed, the longer-run inflation expectations of households and businesses have remained very stable over recent years. The Federal Reserve has not followed the suggestion of some that it pursue a monetary policy strategy aimed at pushing up longer-run inflation expectations. In theory, such an approach could reduce real interest rates and so stimulate spending and output. However, that theoretical argument ignores the risk that such a policy could cause the public to lose confidence in the central bank’s willingness to resist further upward shifts in inflation, and so undermine the effectiveness of monetary policy going forward. The anchoring of inflation expectations is a hard-won success that has been achieved over the course of three decades, and this stability cannot be taken for granted. Therefore, the Federal Reserve’s policy actions as well as its communications have been aimed at keeping inflation expectations firmly anchored.

The Economist adds:

I can’t imagine getting a more direct answer from the chairman than that. Mr Bernanke does not want to risk a de-anchoring of inflation expectations. He is willing to accept 10% or greater unemployment and the resulting economic and political fall-out in order to avoid that risk.

Personally, I think that Mr Bernanke owes us all a better explanation of why he has opted to place so much more emphasis on the price stability aspect of his mission than the full employment aspect. And, there should be a policy debate on this question, the resolution of which should inform the choice to reappoint (or not) Mr Bernanke.

Bernanke faces a defacto confirmation vote on Thursday.  The Senate will vote on cloture to see if Bernanke’s supporters can reach the 60 vote threshold required to send his nomination to the floor for an up or down vote.

Over the last several days, I’ve been asking Democratic and Republican Senators if they support his nomination and whether or not they think he’s done enough to combat unemployment.  Given that the narrow unemployment measure stands at above 10%, and the wider measure of unemployment that counts those working in part-time positions (or jobs for which they are drastically overqualified) stands at nearly 20%, the answers I received shocked me.

By far the worst answers came from Saxby Chambliss and Tom Coburn.  Watch below and see Coburn tell me, “His mandate isn’t  unemployment, his mandate is stable monetary supply.”

And here is audio of Chambliss telling me that Bernanke’s priority is stabilizing the financial markets:

Question:  Do you think he’s doing enough to combat unemployment?  I mean, he’s got a dual mandate:  to control inflation and unemployment.  Unemployment’s at 10%.

Chambliss:  His focus is the financial world and can’t be truly on the issue of unemployment.  That’s more of a policy issue for the White House to be focused on, rather than him.  You know, if the financial community gets stronger then unemployments going to benefit.

In addition to Chambliss and Coburn, I spoke with several Democratic Senators.  Senator Levin, from Michigan where unemployment has hit especially hard, told me that he’s focused on other areas of the Fed Chair’s domain, specifically Bernanke’s future role in regulatory matters.  When asked specifically if he is concerned that Bernanke isn’t focusing enough on maintaining maximum employment, the Senator responded, “That’s not been one of the questions I’ve focused on.  I’ve focused on other issues.”

Watch:

I also spoke with Senator Begich while he was making his way over to the Capitol to cast a vote.  When asked about unemployment, the Senator said he hadn’t seen the Chairman’s statement regarding prioritizing price control over unemployment and went on to say that he “hope[s] he will be open to new ideas.”

Senator Gillibrand, up for re-election and facing a primary threat from Wall Street friend, Harold Ford, had this to say when asked if the Feds prioritization of inflation control over maintaining maximum employment was proper:

Gillibrand:  Well obviously those are the two competing factors and as the Fed Chairman, he’s concerned both about inflation, but he’s also concerned about overarching monetary policy and how that affects the economy.  My biggest concern right now is unemployment.  Jobs creation is my number one agenda item.  So those are issues I want to talk about because, as the Fed Chairman, I want to know what his views are on the various regulatory reforms that have come out of the administration because I’m looking for reforms that are going to truly reduce risk in the system and create a stronger financial services industry so that we can continue to create jobs and most importantly, create lending, particularly in the small business market…

The entire audio is worth a listen (she goes on to say that she supports an audit of the Fed, amongst other things).

I also spoke with New Hampshire Democratic Senator Shaheen who is also undecided with regards to voting to confirm Bernanke.  I told her about the Delong/Bernanke exchange and asked her if Bernanke’s choice to accept higher levels of unemployment was acceptable to her.  She told me, “Well, I don’t think higher levels of unemployment are acceptable under any circumstances in this country and that’s what…  I’ve been working very hard, to address.”

Watch:

In addition to the conversations I had with those presented here, I spoke with at least a dozen others, both supporters and opponents.  In the end, the impression I was left with is that we aren’t well-served by the confirmation process.  The Fed is an impersonal and opaque institution.  We all know it is there, but not very many people understand its role in our economy.  Senators are no exception to the general rule.  These folks have been immersed in health care for months and months; the confirmation of Chairman Bernanke as a serious question never really entered their field of vision until just recently.  Now that it has, it’s too late to do the oversight and inquiry that the American public deserve and need.

Bernanke’s cloture vote will take place tomorrow, the day after the State of the Union.  We may hear a 10 second news blip about him clearing a “key procedural hurdle,” and then the gas-bags will go back to analyzing the President’s body language and the First Lady’s taste in fashion.  Thirty hours after cloture is invoked, sometime on Saturday afternoon, Bernanke will be confirmed.  Bloggers will see the wire report and post a recommended diary or two that will scroll into the ether before America wakes up for work on Monday.

And on Monday, Ben Bernanke will continue studiously ignoring the increasing unemployment rate while ensuring the Wall Street “Masters of the Universe” remain insulated from their disastrous decision-making.

That’s what Senator Kirk told me he thinks will happen. He should know – he’s the guy filling Senator Kennedy’s old seat until Brown is confirmed…

{UPDATE} The Boston Globe is telling a different story. Actually, two different stories…

Story 1 (posted at around 11 pm, about 45 minutes ago):

US Senator-elect Scott Brown is hoping to be sworn in on Feb. 11, according to Eric Fehrnstrom, his senior strategist.

Story 2 (posted at 11:30, about 15 minutes ago):

Yesterday was Brown’s first full day of work in Massachusetts since he won an upset victory last week over Attorney General Martha Coakley in the state’s special election to replace the late Edward M. Kennedy. Brown could be sworn in as soon as next week.

The left has suffered through a lot of bad news over the last few weeks.

Here’s something that should give progressives something to cheer…

The Democratic Caucus is discussing ways of altering or getting around the 60 votes requirement to overcome a filibuster.

I spoke with Senator Bob Casey (D, PA) earlier today. He told me that the Democratic caucus was “working through” how to get around the 60-vote threshold for moving legislation. He said that it was the “subject of a lot of discussion at the end of the year” and “will be in the future”. He went on to say that there may be alternatives to rounding up the required 67 votes to change the rules and the caucus is exploring that. One possible justification for getting creative? According to the Senator, “Sometimes the other party approaches it a different way.”

Reading between the lines, it seems clear that the Caucus was frustrated last year, caught between a rock and a hard place. Senators Landrieu, Nelson and Lincoln face extraordinarily restive and boisterous constituencies egged on by right wing talk radio and astroturfed pr campaigns. Voting for cloture on the health care bill without first obtaining substantial fig-leafs would have been sure electoral suicide. Even after extracting concessions from the rest of the caucus, their re-elections prospects are precarious, at best.

The more liberal members of the caucus are surely aware of this dynamic; they understand the challenges their colleagues face. Finding a means to circumvent the 60-vote requirement may be the sword that cuts the Gordian Knot. Democratic Senators from conservative states could still vote their constituency’s values, without frustrating the will of the entire caucus. Solving this problem is especially important for the more ideologically diverse Democratic caucus that amassed huge electoral gains in the nationalized 2006 and 2008 electoral cycles.

The big news of the day was the long-awaited release of the Supreme Court’s campaign finance decision. After years of grappling with precedent and signalling that he was sick of struggling with it, Justice Kennedy finally took the final step and wrote the decision many of us expected he would. Corporations are now free to spend whatever they want in furtherance of their political aims.

Standing alone, that decision is striking, and to many progressives and Democrats, it is also dangerous. When I mentioned that the holding in the case has led many to believe that media form is more important than ever before, Senator Bob Casey agreed.

The premise is that we are experiencing an unprecedented degree of media consolidation. Across the media spectrum, from radio, to television, to publishing to cinema, fewer people than ever before control larger microphones than ever before. And it is these media corporations that stand to benefit from the windfall of new corporate expenditures about to be deployed in every election cycle. We’ve already seen corporate news providers self-censor out of respect for their advertisers; opening the spigots to allow corporate spending on political advocacy raises some profound questions. For example, (stretch your imagination for this), suppose Monsanto or Goldman Sachs or Boeing have a friend they’d like to keep in Congress. Suppose they decide to spend a few hundred thousand dollars to purchase campaign ads in support of their friendly legislator. Do you think it might be more difficult for a primary challenger to get their message out through the television station on the receiving end of the corporate largess?

Already, from coast to coast, people can turn on their radios and hear conservative talk for fifteen hours a day. The left has no answer to that. And it’s powerful! Democratic legislators spent their entire summer unsuccessfully working to knock down lies about death panels and government takeovers of health care. In a healthy media environment, those lies wouldn’t survive the day they were first uttered; the perpetrator of such a lie would find accountability delivered swiftly and decisively by an indignant and insulted Fourth Estate.

Instead, we’ve got a corporate-owned media whose highest allegiance is to profits (even at the expense of truth). Conflict sells. The tea-baggers, for example, made a great story. The ACORN controversy, a fraudulent controversy that was easily and quickly discredited, consumed countless hours of cable news. The obviously unqualified vice-presidential candidate, Sarah Palin, and shallow back-bench legislators like Michelle Bachmann, Joe Wilson and Steve King, drove news-cycle after news-cycle because they demonstrated a talent for effectively communicating conservative lies to the dregs of the national electorate. News executives didn’t choose these stories because they advanced the national debate; they were chosen because they were conflict-rich and entertaining.

The holding in Citizen’s United has just made a desperate situation that much worse. When media corporations have a fiduciary duty to maximize profit, allowing Exxon-Mobil, General Dynamics, Halliburton, JP Morgan and ADM to purchase unlimited electioneering advertisements is a recipe for disaster.

Already, the dynamics of the Senate telegraphed that progressives weren’t going to see the bold action they yearned for in terms of, inter alia, financial reform, global warming, health care and environmental protection. Sixty Democratic votes are very different from sixty Republican votes; as I said in a previous post, many of the Democratic Senators come from states that didn’t vote for Obama. Those Senators are obligated to represent their constituents and can’t (and shouldn’t) be expected to vote in lock-step with Bernie Sanders. One answer to the progressive conundrum is finding ways of more effectively conveying the Democratic message.

That’s going to be much more difficult to accomplish in the wake of Citizens United.

In 2006 and 2008, Democrats enjoyed watershed elections that, on the surface, seemed to herald in a new age of progressive politics. In 2006, for the first time in decades, not a single Democratic incumbent lost in the House or Senate. In 2008, voters elected even more Democrats to both chambers of Congress and, of course, made Barack Obama President.

It can safely be said that both elections were nationalized. Democrats won because they were not Republicans. Republicans lost because they ran the country into a ditch and it was time for them to go.

The new huge majorities imbued the progressive base with a fantastic amount of hope. When Specter switched parties, providing the 60th Democratic vote in the Senate, anticipation amongst rank and file Democrats was ran thick. Finally, many suggested, we’d see our party take the reins and roll back so much of what had gone wrong in the previous eight – or thirty – years. And there’d be nothing Republicans could do about it.

On paper, it sounded great.

And it never happened.

Looking back, it’s not hard to see why.

Especially in nationalized elections, it’s easy to forget that all politics is local. The truth is, legislators like Blanche Lincoln, Ben Nelson, and Mary Landrieu are every bit as concerned about winning re-election as Bernie Sanders and Dick Durbin are. And the progressive agenda espoused by the majority of the majority simply doesn’t wash with their constituents. I know many progressives would have liked to have seen Harry Reid use a system of carrots and sticks in order to compel party discipline, but that was never going to happen, and for understandable reasons. Leaders don’t (indeed, can’t) throw their most vulnerable to the wolves.

Something progressives need to understand is that these folks are under constant assault. Every single day, large swaths of the electorate (especially seniors, aka voters) in Arkansas, Louisiana and Nebraska begin their day listening to Glenn Beck or Laura Ingraham. At noon, Rush Limbaugh is there to tell them that a vote for cloture is a vote for the bill. At 3, Hannity takes over for three hours. When he finishes, Mark Levin picks up the baton and rolls until nine. All day long, if people turn on their radio, they are likely to hear dishonest fusillades attacking the progressive agenda and any politicians advancing it. And when these hosts sense blood, they turn into sharks.

The 2008 electorate heard “Emplyee Free Choice Act”. In 2009, talk radio listeners heard, “Union thugs taking away your secret ballot and using a tire iron to get you to sign your union card.” In 2008, most of American heard that Democrats would end American involvement in ill-defined wars. In 2009, talk radio listeners are hearing that Democrats are surrendering to Osama bin Laden and Mullah Omar, and providing lawyers to terrorists while they continue to try to blow up airplanes. In 2008 Americans heard that Democrats will enact sensible energy policies and move to counteract global warming. In 2009, talk radio listeners heard that global warming was a fraud cooked up by greedy scientists living off government grants. In 2008, voters heard that health care reform would be open and transparent and paid for by repealing the bush tax cuts. In 2009, over 20 million people heard, every day for 15 hours a day, that the government was taking over the health care system, that Democrats had cut secret deals with insurance and pharmaceutical companies, they’d be forced to purchase insurance from one of health insurance corporations that caused the problems and that if their insurance was too good, they’d have to pay an additional tax.

The truth is, Blanche Lincoln, Mary Landrieu and Ben Nelson, in particular, have been savaged over the last 6 months. The talkers are well-aware that these Senators are vulnerable on a good day; by demagoging the health care debate and scaring the hell out of seniors and tea-baggers, Rush and his ditto-heads owned the summer. In July I watched as an angry crowd of unruly and ill-informed seniors savaged Senator Ben Cardin – in liberal Maryland – at a town hall meeting. One can only imagine how bad things must have been for the Democrats representing red states.

Indeed, if you can read, you don’t have to imagine. The Politico just reported what happened when Ben Nelson went out for pizza.

First, a man heckled him. Within seconds, the entire restaurant was booing him. He had to leave.

This is why Barack Obama has to shoulder the lion’s share of the blame for Democrat’s precarious electoral position. The dynamic I sketched out above isn’t a difficult one to discern – especially for an ex-Senator. Knowing he was swept into power on the tail end of an electoral shift, his team should have realized that he needed to take the lead (and the brunt of the criticism) in selling a progressive agenda to Americans. He should have spent his summer in Arkansas, Nebraska and Louisiana. Instead of flirting with Republicans and constantly extolling the virtues of bi-partisanship, he should have been drawing attention to Republican obstructionism while constantly reminding Americans why they hired Democrats and fired Republicans.

If the President doesn’t move soon to provide cover for vulnerable Democratic legislators, we are likely to see a Democratic caucus in name only.

Progressives and centrists will go their separate ways in last-ditch attempts at saving their own skin. Good people will be replaced by politicians beholden to the Sarah Palin wing of the Republican Party. And Obama’s next three years in office will be his last.

There is a grassroots movement named “Move Your Money“. The idea is that folks tired of seeing Wall Street bankers pull down 7 and 8 digit bonuses after ruining the national economy can exact a small slice of accountability by moving their accounts form the “too big to fail” institutions to smaller, more local banks.

(Full disclosure: I closed my Bank of America accounts last weekend.)

Here’s a little background:

After this evening’s vote, I caught up with several House members and asked what they thought of the idea.

Jan Schakowsky (D, IL) is closing her Bank of America accounts this weekend:

Blue Dog Leonard Boswell (D, Iowa) thinks the idea is a good one:

So does Republican Bob Inglis (R, SC):

And ultra-conservative Blue Dog Dan Boren (D, OK):

Rep. Tom McClintock (R, CA) won’t be changing his banking practices, but he thinks the grassroots are on the right track:

Rep. Tim Bishop represents many of the people working at the big banks. He’s reserving judgment.

Rep. Cynthia Lummis (R, WY) says people should go where they get the best value, all things considered:

Rep. Glenn Thompson (R, PA) isn’t surprised that people are frustrated and keeps his money local:

Finally, Mike Castle, (R, DE), who is probably the happiest man in Washington tonight (he’s the Republican nominee for the Delaware Senate seat formerly occupied by Joe Biden) says that the movement probably won’t be very effective and that the “too big to fail” banks play a critical role in our economy:

Weirdness abounds…

On Wednesday, I spoke with a few House members after they cast their last vote of the day. I ran into Vic Snyder for the first time. He was walking to his car to catch a flight home. I had heard something about him facing an uphill battle for re-election, and after I introduced myself, I dropped a hint. (The following is paraphrased; I didn’t record our conversation.)

Stark: “Oh, man. Vic Snyder. Man, you are in really big trouble…”

Snyder: “Huh? what are you talking about?”

Stark: “Winning re-election. Things are looking pretty ugly back home, huh?”

Snyder: “Oh… whatever… I’m not worrying about that.”

Stark: “Well, I think it sucks. I’m a progressive reporter up here, interested in good guys keeping their seats… So if you think there’s anything worth me reporting, I hope you’ll remember me and let me know.”

Of course, yesterday FDL/SurveyUSA released their poll and within hours, Snyder announced he wouldn’t be running again.

After I got done chatting with Snyder (the talk was brief; he was hurrying to catch his plane), I crossed the street and talked with Shadegg. of course, the next day Shadegg announced his retirement.

So who should I talk to next?

Yesterday I spoke with Republican Rep. John Shadegg. Today, he announced his retirement. I’ve got to try that trick more often!

Anyway, Shadegg is not one of the dumb ones and notwithstanding his retirement, I have a feeling his political future will work out pretty nicely for him. He’s that sharp.

Anyway, I’ve been thinking that if Democrats pass anything like the Senate’s version of health care reform, the Democratic brand will suffer horribly. You simply cannot have a mandate without a public option. The idea that people will have to turn over nearly 10% of their income to a private insurance company isn’t something that is going to sink in until people start seeing it happen in real time. And then, when these insurance companies deny claims… well, the federal government (Democrats) will be seen as the accomplice and handmaiden to the private insurance rip-off industry.

With things so bad, I’ve begun to believe that Republicans must secretly be hoping this thing passes with as much of the Senate language intact as possible. That’s what I asked about.

Shadegg confirmed my worst fears. Republicans can’t wait to get started.

Democrats can’t say they weren’t warned.

I spent the day on the Hill stringing for FireDogLake and taking the temperature of House Democrats with regards to their feelings about the Senate version of health care reform. I asked them about concerns expressed by Marcy Wheeler and Jon Walker.

You’ll recall that the House adjourned a week or so before the Senate passed their version of the bill; for all practical purposes, this is the first day the House has been in session since well before Christmas. I haven’t had the chance to ask House Democrats what they think about being stuck with the Senate’s bill.

As it turns out, there may be a bit of a hitch.

Check out Pete Defazio (D, OR):

I also spoke with Emmanuel Cleaver (D, MO). He said that HCR may not pass the House on the first try; it may need to go back to the Senate for further accommodation before enough House members can support it:

Joe Courtney has been the point person carrying the rock for progressives unhappy with with the excise tax:

I spoke with a lot of Democrats that weren’t prepared to go on video with their concerns yet, but one thing that was (almost) universal was a disdain for being rolled by the Senate. These folks believe they are closer to the people and are (at least) a co-equal component of our bicameral legislature. The idea that these guys should screw their constituents to appease a dysfunctional Senate is absolute anathema to them.

If progressives are fortunate, that sentiment will cement in the coming days and we’ll see a cohesive block of opposition insist on better things.