2A -The Michigan Daily -Thursday, February 16, 2006
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New Federal Reserve Chairman Ben
Bernanke delivers his first economic
report to Congress yesterday.
Bernanke says he is
willing to boost interest
rates in order to combat
WASHINGTON (AP) - New
Federal Reserve Chairman Ben Ber-
nanke said yesterday the economy is
on track for good growth this year,
sticking closely to predecessor Alan
Greenspan's script with one big dif-
ference: His comments were much
easier to understand.
In his debut congressional testimony
as Fed chairman, Bernanke signaled that
the central bank, which has raised inter-
est rates 14 times since June 2004, stood
ready to boost rates more if needed to
Investors and private economists,
who had been apprehensive that Ber-
nanke might sound a tougher line on
inflation than Greenspan, said they
detected no switch in policy from
the Greenspan Fed.
"There were no big surprises. Ber-
nanke kept very much to the promise
he made at his confirmation hearing
that he would maintain continuity with
Greenspan," said David Jones, chief
economist of DMJ Advisors, a private
forecasting firm in Denver.
Wall Street took Bernanke's tes-
timony in stride with stocks ending
the day up slightly. The Dow Jones
industrial average rose 30.58 points
to close at 11,058.97 after rising 136
A respected economics professor
at Princeton before entering govern-
ment service as a Fed governor in
2002, Bernanke demonstrated dur-
ing more than three hours of grilling
from the House Financial Services
Committee that he was up to the
task of answering questions without
upsetting financial markets.
Several committee members in
fact complimented Bernanke for his
straightforward answers, a contrast
to Greenspan, who mastered the art
of using complex sentences to dodge
questions he did not want to answer.
"I can see you are a former teach-
er," said Rep. Carolyn Maloney,
(D-N.Y.) "You are very clear in your
But while Bernanke was more
direct, he skillfully avoided being led
into areas where he did not want to
state an opinion. Democrats tried sev-
eral ways to get Bernanke, who served
last year as Bush's chief economist, to
criticize the president's drive to make
the tax cuts permanent at a time of high
At one point, when pressed for an
opinion on raising the minimum wage,
he apologized, saying, "I am going to
be an economist and give you the one
hand, the other hand" response.
Dressed in a conservative gray suit,
Bernanke sat alone at the witness table,
often scribbling notes on the questions, as
he was pushed to talk about a variety of
issues from soaring budget and trade defi-
cits to what should be done about growing
gap between the wealthy and the poor.
He acknowledged that widening
income inequality was a problem, but
he said it had been occurring for a
quarter-century and as did Greenspan,
he said the best way to deal with the
problem was through education and
The only time Bernanke seemed
uncomfortable was when he was
asked for his reaction to speeches
Greenspan has made, reportedly
for large amounts of money, to an
audience in Tokyo and a New York
"According to government eth-
ics rules ... it is permissible for a
reie (Fd vmover.o. to na in
NEWS IN BRIEF
Cheney takes blame for shooting
Vice President Dick Cheney took the blame yesterday for shooting a hunting
companion, calling it "one of the worst days of my life," but he was defiantly
unapologetic about not publicly disclosing the accident until the next day.
"You can't blame anybody else," Cheney told Fox News Channel in his first
public comments since the accident on a private Texas ranch Saturday. "I'm the guy
who pulled the trigger and shot my friend:'
Cheney said he had had a beer at lunch that day but nobody was drink-
ing when they went back out to hunt several hours later. Law enforcement
officials have ruled out alcohol as a factor.
The vice president has been under intense political pressure to speak out about
the accident, which has become a public relations embarrassment and potential
political liability for the White House. Senior advisers to President Bush worried
that Cheney's silence had suggested a possible cover-up.
Moussaoui allowed back into trial
Unexpectedly allowed back in court, confessed al-Qaida conspirator
Zacarias Moussaoui kept quiet yesterday as two Muslims from South Asia
and a Marine Corps lawyer whose boss's Pentagon office blew up on Sept.
11 cleared preliminary hurdles to sit on his sentencing jury.
U.S. District Judge Leonie Brinkema had barred Moussaoui from jury
selection Tuesday because he wouldn't promise to stop giving insult-laden
Brinkema did not explain her change of mind in court, but she had said
the day before that she might reconsider if Moussaoui decided to alter his
behavior. Even Moussaoui's court-appointed defense lawyers said they did
not know why she changed her mind.
Chertoff admits Katrina response fumbled
Acknowledging delayed aid and fumbled coordination, Homeland Security Sec-
retary Michael Chertoff said yesterday the federal response to Hurricane Katrina fell
far short of providing immediate help to the Gulf Coast that could have saved lives.
Chertoff's Senate testimony came the same day a House panel released a scath-
ing report concluding that deaths, damage and suffering could have been decreased
if the White House and federal, state and local officials had responded more
urgently to Katrina.
"There are many lapses that occurred, and I've certainly spent a lot of time
personally, probably since last fall, thinking about things that might have been
done differently," Chertoff told the Senate Homeland Security and Governmental
Affairs Committee about the Aug. 29 storm.
Three die in prophet cartoon protests
Gunfire and rioting erupted yesterday as tens of thousands of people took
to the streets in Pakistan's third straight day of violent protests over the
Prophet Muhammad cartoons. Three people were killed, including an 8-
The European Union condemned both the cartoons, first printed in a
Danish newspaper in September, and what it called "systematic incitement
to violence" against European diplomatic missions by some unidentified
An article on the front page of yesterday's Daily (MSA votes down $4 student fee
to fund yearbook) incorrectly stated that the Michiganensian lost $50,000 last year.
The loss was actually $36,035.43.
The same story reported that the measure in the Michigan Student Assem-
bly failed by a vote of 18 to 3. The measure in fact failed with 8 votes for, 14
against and 3 abstainations.
Please report any error in the Daily to firstname.lastname@example.org.
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