Sen. Corker: Bernanke's Fed Feeds 'Perverse Addiction'

U.S. Senator Bob Corker (R-TN)
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U.S. Senator Bob Corker (R-TN)

Senator Bob Corker \(R-Tenn.\) blasted Federal Reserve chief Ben Bernanke today, calling him "an enabler of some perverse financial system addiction" in a Financial Times op-ed.

"It would be helpful to have a Fed chairman who acted with a greater sense of humility about what monetary policy can achieve. Mr. Bernanke’s comfort with managing long-term interest rates and his unwillingness to stand up and say that there are limits to what monetary policy can accomplish is disturbing, to say the least," Corker writes. (Read more: What Market Really Thinks Bernanke Will Say on Friday)

Corker argues that financial markets have become too focused around Federal Reserve policy under Bernanke.

"We are getting to the point where this question, and Mr Bernanke’s Fed itself, are becoming unhealthy distractions from improving our free-market system and engaging in fundamental policy debates," he writes.

Corker calls for Congress to abolish the Federal Reserve's so-called "dual-mandate," which requires the central bank to pursue policies of maximum employment and price stability. He would see a single mandate of price stability, following the examples of the European Central Bank, the Bank of England and Germany's Bundesbank. (Read more: Meet the German at the ECB Defending Bond Buying)

He also says Congress should ask the next Fed chairman nominee, "Do you see limits to monetary policy and will you stop punishing savers?"

Critics of the Fed often argue that the Fed's low interest rate policy punishes savers by reducing the income they receive as interest on government bonds and savings accounts at banks. (Read more: Dunkelberg: More Fed Will Not Help the 'Real Economy')

- by senior editor John Carney


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