Paul Krugman Supports Second Bernanke Term

rugman, the Nobel laureate for economics and New York Times columnist, has voiced his support for giving Federal Reserve Chairman Ben Bernanke a second term. [link= http://www.boston.com/business/articles/2009/08/10/nobel_laureate_backs_bernanke/][u]Bloomberg News[/u][/link] reports that Krugman acknowledged that although Bernanke ‘failed’ to see the warning signs of the recession, he nonetheless believes he rose to the challenge. ‘He's earned the right to a second term,’ says Krugman. ‘He turned the Fed into the financial intermediary of last resort. When the banking system failed to deliver capital where it was needed, he put the Fed into the markets.’ Krugman's input follows a differing opinion from another Nobel Prize-winning economist, Josept Stiglitz, who advocated a new Fed chairman. ‘There are lots of potholes in the road,’ said Stiglitz in an Aug. 5 interview. ‘There are problems in commercial real estate. We know that there will be more foreclosures in the mortgage market, and we know we don't know the state of the banks.’ Bernanke's term concludes in 2010. SOURCE: Bloomberg N

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