The central bank, more than the White House or Congress, can boost lending to small firms, the largest source of new jobs. That's why the Senate must give Ben Bernanke a second term.
The person best able to bring back jobs to unemployed Americans spent Thursday trying to keep his own job.
Ben Bernanke had to justify another four-year term for himself as chairman of the US central bank before a skeptical Senate Banking Committee. It now looks as if he'll get to keep his gainful employment, but the grilling of the Federal Reserve chief on Capitol Hill only shows why he – more so than the one-day "jobs summit" at the White House – is the government's best hope to spur private-sector hiring.
The Fed has already poured more than $1 trillion of newly printed dollars into the economy since 2008, kept interest rates near zero, and saved many faltering but "too big to fail" financial institutions. Now it is using its immense powers as a regulatory agency to squeeze banks and others to start lending to small businesses – the nation's largest source of new jobs, especially during a recovery.
While Congress debates tax credits for employers or whether to spend more in another stimulus package, it is the Fed that will best drive the economy back to prosperity. That explains the political pressure on Mr. Bernanke to commit to a stronger-than-usual jobs-creation policy from members of Congress who face voters next year.
"Jobs are the issue right now," the Fed chief told the senators.