President Obama nominated Ben S. Bernanke for a second term as Federal Reserve chairman Tuesday, giving the nation's top economic policymaker the chance to finish what he started and shape his own legacy as one of the most consequential central bankers in U.S. history.
Having remade the Federal Reserve in his first four-year term, Bernanke will now also manage the aftermath of his actions, assuming he is confirmed by the Senate. In his first term, Bernanke launched a series of unprecedented interventions to combat the worst economic crisis since the Great Depression, actions that seem to be stabilizing the economy. In his second term, Bernanke would take charge of trying to unwind those actions in a manner that doesn't cause either a return to recession or unwelcome inflation. He would simultaneously try to fend off new attacks on the Fed's independence and authority.
Until recently, many Fed watchers had expected Obama to seek a replacement for Bernanke, who was appointed by President George W. Bush and failed to prevent a deep recession. But the economy is stabilizing, and private economists and Obama give Bernanke a large chunk of the credit. Appointing someone new, such as White House economic adviser Lawrence H. Summers, risked discombobulating financial markets and creating a potentially difficult confirmation process that could distract from other priorities.