Bernanke’s Job Interview

President Obama will gather around 130 liberal economists, union leaders, Fortune 500 executives, and even a few small-business owners at the White House Thursday for a “jobs summit.”

Republicans have derided this gathering as a meaningless gesture, but that hasn’t stopped House Minority Leader John Boehner of Ohio from deciding to hold his own “jobs summit” with conservative economists at his office in the Capitol.

This is how business is done in Washington these days: one party in its corner, the other in its corner. The only jobs being created are the ones held by the spinmeisters who crank out partisan gibberish on an hourly basis.

Thursday’s summit does create some pressure on the White House to do something tangible on the job-creation front, not just talk about it. Maybe the Treasury Department this week will roll out its initiative, announced in October, to provide low-cost capital to community banks for lending to small businesses. That could actually create jobs if community banks decide to participate in the program. They might not, however, thanks to all the strings attached to Troubled Asset Relief Program funds, the source of the capital that Treasury would provide to community banks.

Meanwhile, House Democrats are talking about putting together legislation this month that would help the jobless by extending unemployment benefits and subsidized health insurance coverage for the unemployed, as well as create new jobs by giving businesses tax credits for hiring new workers, spending more money on infrastructure and enhancing Small Business Administration loan programs. But the bill’s $100 billion or so cost could make it too pricey even for the House, especially when health care reform still hasn’t made it to the president’s desk.

So don’t expect much action this week on jobs, except for one job in particular: that of Federal Reserve Chairman Ben Bernanke. The Fed chief appears before the Senate Banking Committee Thursday for a hearing on whether he should be confirmed for another term at the central bank. It should be one hell of a job interview.

For starters, the panel’s chairman, Senator Chris Dodd, Connecticut Democrat, wants to take away much of the Fed’s power as part of sweeping legislation to reform regulation of the financial industry. Other members of the committee will take swipes at Bernanke for being blindsided by last year’s financial meltdown and then spending billions of dollars bailing out firms like American International Group and Bear Stearns.

Bernanke appears ready to take on all comers: He wrote an op-ed in Sunday’s Washington Post that criticized Dodd’s legislation, which would strip the Fed of its banking regulatory powers, and derided House legislation that would subject the Fed’s decisions on monetary policy to audits by the Government Accountability Office, an arm of Congress.

“These measures are very much out of step with the global consensus on the appropriate role of central banks, and they would seriously impair the prospects for economic and financial stability in the United States,” Bernanke wrote. “The Fed played a major part in arresting the crisis, and we should be seeking to preserve, not degrade, the institution's ability to foster financial stability and to promote economic recovery without inflation.”

It’s one thing to defend yourself in an op-ed; it’s another to do it on the hot seat at a Senate hearing. Bernanke is likely to be confirmed for another term unless he cracks under the pressure. But he can do a lot for the economy—and, ultimately, jobs for everybody else—if he can convince us that he actually does know what he’s doing.