I’m not particularly fluent in the language of political theater, but I get two clear messages from today’s testimony. Paulson is the grown-up, telling Congress what to do: I need literally unimaginable sums of money, he’s saying, because everything we’ve tried so far hasn’t worked, and when your bazooka fails, it’s time to start packing a rocket-launcher. And Bernanke is the poodle, basically pointing to Paulson and saying "what he said" — following by example, you might say.
I have no idea whether this is the best way to get Congress to fall in line. This, for me, is the key part of Bernanke’s testimony:
Despite the efforts of the Federal Reserve, the Treasury, and other agencies, global financial markets remain under extraordinary stress. Action by the Congress is urgently required to stabilize the situation and avert what otherwise could be very serious consequences for our financial markets and for our economy.
Translation: This is no time for Constitutional checks and balances: we all need to give up our cherished independence and support one leader in this time of crisis. And that leader must be Hank Paulson. I’ve done it; you should too.
The problem is that legislators, with good reason, tend to get brushed the wrong way when they’re told that they’re not in charge. They’re the only elected officials in the room, and Paulson himself admits in his testimony that the actions of unelected technocrats have been woefully insufficient thus far.
As we’ve worked through this period of market turmoil, we have acted on a case-by-case basis… These steps have been necessary but not sufficient.
More is needed.
This sounds very much like "something must be done, this is something, so support me in doing it". It’s a risky tack to take, especially in an election year when politicians like to show themselves to be leaders, rather than the followers of unelected officials whose policies to date have clearly failed.