This week, President Obama nominated Ben Bernanke to serve as the Federal Reserve Chairman for a second term. Although the timing of the nomination was earlier than most people expected, the appointment was no surprise and may have been influenced by his recent speech in which he said he would "not let a depression happen on [his] watch." Bernanke's speech brings back memories of George Bush Sr.'s famous line, "Read My Lips, No New Taxes." Both speeches helped each secure office yet Bernanke's claim that a depression will not occur under his watch will prove to be as prophetic. The collapse of the credit and housing bubbles was the beginning of a depression. Whether we ultimately suffer from a deflationary or a hyperinflationary depression is inconsequential because either scenario will result in poverty for millions of Americans.

There are three points of contention with Bernanke's reappointment as Federal Reserve Chairman. The first is simply that he was willing to take the job for his first term. If Bernanke had foreseen the problems within our unbalanced economy, he would not have taken on the role. Signs of the housing bubble were apparent by 2003, yet he accepted the position in 2005. If his sole concern was to avoid a depression he should have used the Federal Reserve's powers to curtail the crazy lending practices evident before the housing bubble burst. Instead, Bernanke waited until 2008 to slash interest rates just months after repeatedly stating both that the housing problem was contained to subprime and that there was no recession.

Second, even if we ignore Bernanke's poor forecasting capabilities, we should remember that Greenspan and Bernanke created the current economic backdrop by 'battling' what they then believed to be the start of a depression following the bursting of the NASDAQ bubble. Both thought maintaining rock-bottom interest rates for an extended period of time was the only way to avoid a Japanese style contraction. This band-aid solution that lasted from 2003-2007 inevitably destroyed the economy, and remarkably, has given Bernanke the opportunity to take credit for averting the very depression he helped to create.

Third, and most worrisome, is that Bernanke has taken it upon himself to decide society's winners and losers rather than allowing the free market to decide. Bernanke's actions to avoid a depression have repeatedly been centered around lowering interest rates, thus advantaging the very banks that made bad loans and the individuals who irresponsibly took on more debt than they could support. On the other hand, those who were prudent and saved are being harmed by non-existent interest rates and the loss of purchasing power caused by inflation. Extremely low interest rates force people to take added risk in order to obtain a reasonable return on their savings.

President Obama made the easy choice by nominating Ben Bernanke for a second term as Fed Chairman. However, in doing so, he has chosen to sacrifice our future in exchange for short-term benefits. Low interest rates and cheap capital entice individuals and investors to speculate. Yet, it was hard work and saving money that transformed the US into the world's financial leader. With Bernanke's reappointment, we can be certain that the Federal Reserve's policies will continue to place at risk the foundation of our economy.