If that weren’t enough, polls show voters souring on the president and Congress and November’s mid-term elections already loom large.
“They’re going to try to give him a hard time so when they are on their local TV news show, it looks like they’re standing up for the little guy,” says money manager James Awad, managing director of Zephyr Management. ”The rhetoric may be a little rough, but not the substance. Everybody realizes the population is stirring and angry and not sure where to take it out on.”
“I think it might get a little uncivil,” says Dean Baker, co-director of the Center for Economic Policy And Research.
That covers the rhetoric and drama. Now the politics.
At various times during Bernanke’s Senate confirmation hearing, he was blamed for contributing to the financial crisis and recession, favoring Wall Street over Main Street and prolonging the misery. Some faulted him for doing too much, others for doing too little.
“I think there’s still some concern." says one senior Congressional staffer close to the Democratic leadership.
Analysts don’t expect the hearing to be as hostile as that one, but Bernanke’s critics will be very visible and vocal during his appearance, which is ostensibly to discuss the central bank’s economic and policy outlooks.
“He'll be taking a beating whenever he appears before Congress until the economy is clearly out the woods,” says David Resler, economist at Nomura Securities. “There’s a lot of resentment about the Fed, a lot of finger pointing.”
“Bernanke’s kind of a foil, but he's not responsible; there’s some anger at banks,“ says Robert Brusca of Fact & Opinion Economics. “The Fed chairman always has his detractors.”
The agenda of the House Financial Services Committee will only add to the show. According to a committee briefing paper, the purpose is to examine the Fed’s available policy options “to meet its mandate of fostering maximum sustainable employment” as well as those “to exit from the emergency liquidity programs put in place during the height of the economic crisis.”
That’s clearly a tall order and perhaps a contradictory one.
“Those are coming from different sides,” says Baker, adding that some in Congress are very worried about a serious spike in inflation while the majority is fixated only on economic growth.
“There’s going to be a small and vocal minority on the Hill and on Wall Street that says, ‘We don’t think your exist strategy is credible,” says Mark Calabria, a former senior staffer on the Senate Banking Committee, now with the Cato Institute.
Both groups already have plenty on record about Bernanke’s exit strategy. The Fed released Bernanke's testimony on the subject after a hearing featuring the Fed chairman earlier this month that was postponed because of a snowstorm.
Some say Bernanke and the Fed’s board of governors also set the table last week with a modest hike in the discount rate, which was widely interpreted as another small step in weaning the big banks of cheap money and otherwise having no impact on the broader interest-rate equation.
“In a sense, this provides him a little cover from the [financial firm] bailouts,” says Calabria. “He could say,‘This is not directed at overall liquidity.’”