Bernanke has Obama's 'confidence'

by Mark Silva

Will the betting line on Ben Bernanke's longevity at the Federal Reserve improve with these words from President Barack Obama's senior adviser?

The president "has a great deal of confidence" in the Federal Reserve chairman, Obama adviser Valerie Jarrett said today on CNBC's Squawk Box. "He oversaw the whole stress test, which was complicated and could have been unpredictable, and we came through that very well.''

Bernanke gets "great marks" because "many of the banks are now in a position where they can return the money the Federal Reserve loaned them,'' says Jarrett, who takes part in the daily economic briefings that the President gets with National Economic Council Director Lawrence Summers and Treasury Secretary Timothy Geithner.

"The worst kept secret in economic circles in Washington is that Larry Summers, President Barack Obama's chief economic guru, covets Ben Bernanke's job,'' FOX Business Network's Matt Egan suggests. "But concerns over Summers' temperament and how financial markets would react to a new Fed chief, as well as positive feedback about Bernanke's performance during the credit crisis, suggest Summers would be smart to keep his day job.''

Bernanke has confronted tough questioning from Congress about his conduct in Bank of America's takeover of Merrill Lynch. But Jarrett said Bernanke "did very well" in his testimony.

"I'm not going to make news about Ben Bernanke,'' Obama said at his news conference this week, " although I think he has done a fine job under very difficult circumstances.

(Federal Reserve Chairman Ben Bernanke testified on Capitol Hill on Thursday at a House Oversight and Government Reform Committee hearing on the Bank of America acquisition of Merrill Lynch. (Photo by Kevin Wolf / AP)

"I would say that all financial regulators didn't do everything that needed to be done to prevent the crisis from happening,'' the president said of the financial market collapse that prompted a multibillion-dollar federal bailout at the urging of Bernanke and former Treasury Secretary Henry Paulson as President George W. Bush was leaving office.

Obama is seeking broader authority now for the Federal Reserve, as part of a financial regulatory overhaul that he is proposing.

"I think that the Fed probably performed better than most other regulators prior to the crisis taking place, but I think they'd be the first to acknowledge that in dealing with systemic risk and anticipating systemic risk, they didn't do everything that needed to be done,'' Obama said.

"I think since the crisis has occurred, Ben Bernanke has performed very well,'' the president said at his news conference.

"And one of the central concepts behind our financial regulatory reform is that there's got to be somebody who is responsible not just for monitoring the health of individual institutions, but somebody who's monitoring the systemic risks of the system as a whole. And we believe that the Fed has the most technical expertise and the best track record in terms of doing that.''

Here, courtesy of CNBC, is a transcript of Carl Quintanilla's interview of Valerie Jarrett:

QUINTANILLA" JOINING US FROM THE WHITE HOUSE NORTH LAWN FOR A "SQUAWK" EXCLUSIVE, VALERIE JARRETT, SENIOR WHITE HOUSE ADVISER AND ASSISTANT TO THE PRESIDENT FOR INTER-GOVERNMENTAL AFFAIRS AND PUBLIC LIAISON. IT'S GREAT TO HAVE YOU ON THE PROGRAM, ALONG WITH ROBERT WOLF. GOOD MORNING TO YOU.

JARRETT: GOOD MORNING. ROBERT, IT'S GOOD TO SEE YOU.

QUINTANILLA: YOU'RE CATCHING US ON A MORNING WHERE OUR ATTENTION HAS TURNED TO THE HOUSE AND CAP AND TRADE. WE ALL WANT TO SEE WHAT HAPPENS WITH THIS VOTE, IF IT HAPPENS. CAN YOU GIVE US ANY CLARITY AS TO WHETHER OR NOT THAT IS GOING TO HIT AND WHETHER OR NOT PELOSI HAS THE VOTES?

JARRETT: WELL, WE'RE WORKING ON IT.THE PRESIDENT WAS ON THE PHONE YESTERDAY. WE HAD A LUAU HERE AT THE WHITE HOUSE --

QUINTANILLA: A LUA?

JARRETT: YES. IT WAS VERY EXCITING.

KERNEN: CARBON NEAUTRAL?

JARRETT: EXACTLY. WE'RE WORKING VERY HARD. IT'S IMPORTANT TO OUR ECONOMY.WE HAVE TO REDUCE OUR DEPENDENCE ON FOREIGN OIL.WE HAVE TO FIND WAYS OF BECOMING ENERGY EFFICIENT AT HOME, WHETHER IT'S SOLAR, WIND, CLEAN COAL OR SAFE NUCLEAR. SO WE ARE WORKING THE PHONE AND WORKING VERY HARD. ITS A JOB CREATOR IT WILL HELP SAVE MILLIONS OF DOLLARS, BILLIONS FOR OUR ECONOMY.WE DON'T KNOW RIGHT NOW IF WE HAVE THE VOTES BUT WE WILL WORK UP UNTIL THE LA MOMENTS.

QUINTANILLA: IT'S SAID ABOUT YOU THAT YOUR JOB -- YOU SPECIALIZE IN SMOOTHING OVERFEATHERS RATHER THAN RUFFLING THEM.WE KNOW WHO HAS THAT JOB. WHEN YOU'RE WORKING THE PHONES OVER THE LAST 24, 48 HOURS, WHAT IS THE COMPLAINT YOU'RE HEARING MOST ABOUT THIS PENDING LEGISLATION?

JARRETT: YOU KNOW, I THINK IT'S NERVOUSNESS OUT THERE. FRANKLY, WHEN YOU LOOK AT THE MERITS OF THE BILL AND WHAT IT'S GOING TO DO FOR OUR COUNTRY, I DON'T UNDERSTAND THE RESERVATION. PART OF WHAT WE'VE BEEN PITCHING. THIS IS A JOBS BILL. AMERICANS ARE SUFFERING. WE HAVE RECORD UNEMPLOYMENT. IT'S IMPORTANT TO JUMPSTART THE ECONOMY -- THE PRESIDENT HAS DONE THAT

QUINTANILLA: VALERIE?

JARRETT: YES.

QUINTANILLA: I WANT TO JUST TAKE A BRIEF PAUSE JUST FOR A SECOND WHILE WE'RE WITH YOU.WE ARE LOOKING AT A LIVE PICTUREHERE OF HOUSTON WHERE ALLEN STANFORD ABOUT 24 HOURS AGO WE SAW HIM COME OUT OF A BUS JUST LIKE THIS ONE. FOR HIS ARRAIGNMENT.AND I THINK HE'S GOING BACK INTO COURT AGAIN TODAY. WE'VE BEEN HEARING FROM SCOTT COHN, WHO'S OUTSIDE THE COURTHOUSE IN HOUSTON WHO MIGHT BE ABLE TO TELL US, SCOTT, WHAT MAY HAPPEN TODAY, IF ANYTHING?

PAUSE FOR BREAKING NEWS

QUINTANILLA: OUR APOLOGIES TO VALERIE JARRETT, WHO WE RETURN TO.

JARRETT: NO PROBLEM.

QUINTANILLA: VALERIE, IT DOES POINT TO THE ENVIRONMENT WE'RE IN WHERE THAT GETS SO MUCH ATTENTION. AND THERE IS NATURALLY SUSPICION AMONG PROBABLY MOST AMERICANS ABOUT THINGS SURROUNDING WALL STREET. WHEN THE PRESIDENT WAS IN THE MIDST OF TRYING TO FIX THE CHRYSLER AND GM SITUATION, HE REFERRED TO THESE BIG BANKS, BIG CREDITORS AND IN HIS WORDS HE SAID THE ONES HOLDING OUT TO BANKRUPTCY, I DON'T SIDE WITH THEM. SOMETHING TO THAT EFFECT. HOW CAN YOU GUARANTEE OR REASSURE THE STREET THAT THE PRESIDENT HAS THEM AND THEIR INTERESTS IN MIND?

JARRETT: OF COURSE THE PRESIDENT HAS WALL STREET IN MIND. WHEN HE CAME INTO OFFICE, ONE OFTHE FIRST THINGS HE DID WAS TRY TO STABILIZE THE BANKING MARKET. HE INFUSED BILLIONS OF DOLLARS TO HELP STABILIZE OUR BANKS. WE ARE OBVIOUSLY VERY CLEAR WE HAVE TO HAVE A STRONG BANKING SYSTEM.OUR ECONOMY DEPENDS ON IT, BUSINESSES DEPEND ON IT. I THINK IF YOU LOOK AT THE PROGRESS WE'VE MADE OVER THE LAST FEW MONTHS, AS ROBERT WAS SAYING BEFORE I CAME ON AIR, THERE WAS A HUGE CALM WITHIN THE BANKING COMMUNITY. THEREFORE THE BUSINESS COMMUNITY AS A WHOLE COMPARED TO WHERE WE WERE FIVE MONTHS AGO.OF COURSE THE PRESIDENT IS CONCERNED ABOUT WALL STREET AND APPRECIATES WHAT IT DOES BY OUR OVERALL ECONOMY.

WOLF: IN NO SURPRISE I AM GOING TO MOVE THIS OFF WALL STREET RIGHT NOW. I'M GOING TO ASK YOU A MORE BROAD QUESTION.IN YOUR ROLE AS SENIOR ADVISER AND POINT PERSON FOR THE PRESIDENT FOR BUSINESS OUTREACH BEING WHAT ARE SOME OF THE MAIN CONCERN YOU'RE HEARING FROM CEOs WITH RESPECT TO THE ADMINISTRATION'S DIRECTION? I KNOW YOU'RE GETTING CALLED 24/7 ON DIFFERENT THING.

JARRETT: YES, I DO.IN FACT, ROBERT, YOUR E-MAIL TO ME IS FREQUENT AND I APPRECIATE IT. IN ALL SERIOUSNESS, ROBERT IS ACTIVE IN HELPING ME REACH OUT TO THE BUSINESS COMMUNITY AND GIVING ME AS MUCH INFORMATION AS POSSIBLE RIGHT AWAY.I THINK WHAT WE'RE SEEING IS, LOOK, EVERYONE IS CONCERNED. WE WERE JUST FACED WITH ONE OF THE WORST ECONOMIES IN OUR LIFETIME. NONE OF US IN OUR PROFESSIONALS HAVE FACED THE KIND OF CRISIS WE'VE SEEN OVER THE LAST YEAR. SO THE BUSINESS COMMUNITY OF COURSE IS JITTERY.I THINK WHAT THE PRESIDENT HAS DONE IS TRY TO TAKE VERY CLEAR ACTIONS TO GET OUR ECONOMY BACK ON TRACK AND CREATE AN ENVIRONMENT, WHETHER THERE IS STABILITY.OFTEN I HEAR FROM THE BUSINESS COMMUNITY, WE'RE CONCERNED ABOUT TOO MUCH REGULATION.I THINK WHAT WE HEAR FROM THE AMERICAN PEOPLE IS THEY WANT TO MAKE SURE THERE'S A LEVEL PLAYING FIELD AND IT'S PREDICTABLE AND THEY KNOW WHAT'S GOING TO HAPPEN. THERE ARE CERTAIN RULES OF THE ROAD SO WE DON'T SEE THE KIND OF CRISIS THAT WE'VE SEEN OVER THE LAST YEARS. SO THE BUSINESS COMMUNITY'S TRYING TO FIGURE OUT WHAT THOSE RULES ARE.AS YOU'VE SEEN FROM OUR TREASURYDEPARTMENT AND FROM THE THE FEDERAL RESERVE, WE ARE ROLLING OUT THOSE RULES AS QUICKLY AS WE CANSO THAT THERE IS THIS ENVIRONMENT OF STABILITY AND PREDICTABILITY.

QUINTANILLA: ONE THING THAT MIGHT BPRING STABILITIABLY, IS SOME REASSURANCE FROM THE PRESIDENT THAT HE WOULD REAPPOINT BEN BERNANKE AS CHAIRMAN OF THE FED. WHY HAS HE BEEN UNABLE TO DO THAT THUS FAR?

JARRETT: YOU KNOW WHAT I AM GOING TO LET THE PRESIDENT SPEAK TO THAT I THINK WHAT HE HAS SAID ABOUT BEN BERNANKE IS HE HAS A GREAT DEAL OF CONFIDENCE IN HIM HE HAS DONE A TERRIFIC JOB. HE OVERSAW THE WHOLE STRESS TEST, WHICH WAS COMPLICATED AND COULD HAVE BEEN UNPREDICTABLE AND WE CAME THROUGH THAT PROCESS VERY WELL. MANY OF THE BANKS ARE NOW IN A POSITION WHERE THEY CAN RETURN THE MONEY THE FEDERAL GOVERNMENT LOANED TO THEM. SO I THINK BEN GETS GREAT MARKS. AND AS TO HIS FUTURE, I'LL LEAVE THAT TO THE PRESIDENT.

QUINTANILLA: IS LARRY SUMMERS A CONTENDER IN THE PRESIDENT'S VIEW?

JARRETT: I'M CERTAINLY NOT GOING TO DISCUSS WITH YOU WHO THE PRESIDENT IS CONSIDERING FOR APPOINTMENTS.

QUINTANILLA: DOES THE PRESIDENT BELIEVE THE CHAIRMAN DID A SERVICE TO HIMSELF IN FRONT OF THE HOUSE COMMITTEE YESTERDAY.

JARRETT: I THINK HE DID WELL. I THINK HE DID VERY WELL. AS I SAID, HIS TRACK RECORD NOT JUST YESTERDAY BUT THROUGHOUT THE PRESIDENT'S TENURE HAS BEEN TERRIFIC AND I THINK WE ALL OWE HIM A DEBT OF GRATITUDE FOR HOW WELL HE'S DONE.

QUINTANILLA: THERE WERE SOME REPORTS ON HEALTH CARE THAT THE PRESIDENT -- DEPENDING ON THE HEADLINE YOU READ, HAS SAID A PUBLIC OPTION IS NEGOTIABLE IN SOME WAY. CAN YOU GIVE US CLARITY AS TO WHAT THE WHITE HOUSE WOULD BE WILLING TO TOLERATE IN THE WAY OF A DILUTED OR SOMETHING OTHER THAN A PUBLIC OPTION?

JARRETT: LOOK, WHAT THE PRESIDENT HAS DONE THROUGHOUT THIS PROCESS WITH HEALTH CARE IS HE BROUGHT TOGETHER ALL OF THE STAKEHOLDERS TO THE TABLE. FIRST TIME THIS HAS EVER HAPPENED WE'VE HAD EVERYONE FROM THE HOSPITAL ASSOCIATIONS TO THE PHARMACEUTICAL INDUSTRY. YOU SEE LAST WEEK THE ANNOUNCEMENT THAT THE PHARMACEUTICAL INDUSTRY MADE ALONG WITH AARP, THEY HAVE NEW ENGLAND COME TO THE TABLE BEFORE.WE HAVE EVERYONE WORKING ON THE BILL. WHAT THE PRESIDENT SAYS, LOOK, WHAT I WANT TO DO IS MAKE SURE WE REDUCE COSTS. THAT'S THE NUMBER ONE ISSUE.WE HAVE TO MAKE SURE PEOPLE HAVE AFFORDABLE HEALTH CARE, THEY HAVE THEIR CHOICES HE DOESN'T WANT ANYONE TO HAVE TO SWITCH PLANS. IF YOU LIKE WHAT YOU HAVE NOW, YOU SHOULD BE ABLE TO KEEP WHAT YOU HAVE AND HE ALSO SAID, LET'S INTRODUCE PUBLIC PLAN AND HAVE COMPETITION. WHY WOULD WE FEAR HAVING COMPETITION?HE'S BEEN CLEAR ON LAYING OUT WHAT HE WANT TO DO, REDUCE COSTS, HAVE APPROPRIATE COVERAGE, MAKE SURE THAT PEOPLE THAT DON'T HAVE IT WILL HAVE IT AVAILABLE TO THEM GOING FORWARD.SO HE'S LAID FORTH WHAT HE WANTS TO DO.

QUINTANILLA: AND YOU --

JARRETT: AND THE REST IS UP TO CONGRESS. HE'S SAYING, LET'S SEE WHERE WE GO. I THINK WHAT YOU WANT IS YOUR PRESIDENT TO SAY, THIS MAKES SENSE, LET'S BEGIN THE DIALOGUE AND THAT'S WHAT WE'VE SEEN SO FAR.

QUINTANILLA: YOU ACKNOWLEDGE THE COMPETITION IS ONE THING, COMPETING AGAINST A GOVERNMENT WITH A HOST OF ADVANTAGES OVER THE PRIVATE SECTOR DOESN'T ENJOY IS A DIFFERENT THING

JARRETT: WELL THE POINT IS IT TO MAKE IT A LEVEL PLAYING FIELD. WE'RE NOT LOOKING TO HAVE A PUBLIC PLAN WITH A HOST OF ADVANTAGES IT WILL COMPETE JUST THE WAY THEPRIVATE SECTOR DOES --

QUINTANILLA: BUT WOULDN'T YOU BE ABLE TO NEGOTIATE BETTER DEALS, THE ADMINISTRATIVE COSTS ARE LOWER --

KERNEN: NOT PAYING TAXES, NOT PAYING EMPLOYEES.

JARRETT: WELL LET'S JUST SAY THIS WE'RE LOOKING TO MAKE IT AS LEVEL AS POSSIBLE AND LET'S HAVEA LITTLE COMPETITION.AND I THINK THE ACTUAL CRAFTING OF THE PUBLIC PLAN IS TO BE DETERMINED. LET'S HAVE A DIALOGUE. THE PRESIDENT'S GOAL IS NOT TO HAVE A PUBLIC PLAN THAT IS SUBSIDIZED TO GIVE COMPETITIVE ADVANTAGE TO IT. HE'S JUST SAYING DON'T THE AMERICAN PEOPLE DESERVE CHOICES HERE.LET'S PUT IT ON THE TABLE AND TRY TO CRAFT THE PLAN WHERE THERE'S FREE COMPETITION.

KERNEN: IT'S POINTED OUT IN THE JOURNAL TODAY, THERE'S 100 PRIVATE PLANS AND HARD TO SAY THEY'RE NO COMPETITION, AT LEASTNO PUBLIC PLAN AT THIS POINT BUT AMONG PRIVATE PLANS THERE IS COMPETITION. MY QUESTION IS, THE PRESIDENT WANTS TO SAVE THE ECONOMY. WE'LL HAVE THE MOST REGULATION -- OR THE BIGGEST REGULATORY CHANGES SINCE PROBABLY GLASS STEEL, SINCE THE DEPRESSION.HEALTH CARE, 17% OF THE ECONOMY. WE'LL TAKE THAT ON.CAP AND TRADE, ONE OF THE BIGGEST INITIATIVES THAT WE'VE TRIED TO UNDERTAKE AND THEN COMPLETELY REVAMPING TAX POLICY. SOME OF OUR GUYS -- JACK WELCH WILL SAY, CAN WE JUST SLOW DOWN A LITTLE?CAN WE JUST LOOK AT WHAT WE'RE DOING AND MAKE SURE -- THESE ARE IMPORTANT THINGS. DOES YOUR HEAD EVER START SPINNING FROM TRYING TO DO ALL THIS AT ONCE?

JARRETT: OF COURSE OUR HEAD IS SPINNING. BUT I THINK WHAT THE PRESIDENT WAS ELECTED TO DO WAS TO BE AMBITIOUS. WE HAVE HUGE PROBLEMS IN THIS COUNTRY AND THEY'RE ALL INTERRELATED. WE PASSED THE STIMULUS $800 BILLION STIMULUS INFUSED INTO THE ECONOMY. THAT'S A SHORT-TERM FIX. WHAT WE ARE HAVE TO DO IS BUILD THE PILLAR OF A LONG-TERM SUSTAINABLE ECONOMY.I THINK THAT'S WHAT HE WAS ELECTED TO DO. THAT'S WHAT AMERICANS EXPECT HIM TO DO. THAT'S WHAT THE BUSINESS COMMUNITY EXPECTS FROM HIM CERTAINLY HE'S GOING TO TAKE ON ENERGY AND HEALTH CARE AND PUBLIC EDUCATION ALL AT THE SAME TIME BECAUSE THAT'S WHAT NEED TO DO FOR A LONG TERM STABLE ECONOMY. I THINK YOU WANT A PRESIDENT WHOCAN MULTI-TASK. HE HAS A TEAM OF EXPERTS AROUND ALL OF THOSE AREAS.WE'RE WORKING COLLABORATIVELY WITH THE BUSINESS COMMUNITY. I THINK THAT'S EXACTLY WHAT WE SHOULD BE DOING. WE'RE NOT -- JUST BECAUSE WE'RE MOVING QUICKLY DOESN'T MEAN THATWE ARE -- WE'RE NOT DELIBERATING OVER EVERY SINGLE THING WE'RE DOING.AND SO I THINK YOU CAN DO BOTH. I THINK YOU CAN MOVE FORWARD, A COMPREHENSIVE AGENDA ON ALL FRONTS AND I THINK YOU CAN DO IT WITH DELIBERATE SPEED.

WOLF: VALERIE, I'M GOING TO SEGUE BACK TO THE ECONOMY BECAUSE I'M IN AGREEMENT WITH THE PRESIDENT THAT IF YOU DON'T FIX HEALTH CARE AND YOU DON'T FIX ENERGY, THEN YOU'RE NOTGOING TO FIX THE ECONOMY. I FULLY SUPPORT THAT MOTIVE THAT YOU TO HAVE TO DO SEVERAL THINGS AT ONCE. IN THE PAST WEEK THE ADMINISTRATION INCLUDED, MANY ARE CALLING FOR UNEMPLOYMENT NORTH OF 10%. SOME OF THE POLICIES, WHAT GIVES YOU HOPE THAT WE'RE MOVING IN THE RIGHT DIRECTION, EVEN THOUGH SOME OF THE LAGGER INDICATORS, LIKE UNEMPLOYMENT, IS STILL MOVING UP? WHAT GIVES YOU HOPE THAT THE POLICIES THAT THE PRESIDENT HAS PUT IN PLACE ARE STARTING TO WORK?

JARRETT: WE'RE SEEING INVESTMENT. YOU KNOW ABOUT THIS ROBERT, WE TALK ABOUT IT EVERY DAY. I AM MEETING WITH COMPANIES WHO BELIEVE IN AMERICA WHO ARE INVESTING IN OUR COUNTRY WHO ARE CREATING JOBS. YES UNEMPLOYMENT IS A LAGGING INDICATOR AND WE ARE LOSING JOBS BUT AT THE SAME TIME AS WE'RE LOSING JOBS I'M SEEING A GREAT DEAL OF INVESTMENT AND CONFIDENCE IN OUR COUNTRY.IN THE UNITED STATES, WE GET KNOCKED OUR ON HEELS, WE WORK HARD, PICK OURSELVES BACK UP, GET BACK IN THE GAME.YOU COMMENTED EARLIER ABOUT THE BANKING INDUSTRY STABILIZING. THERE'S LIQUIDITY IN THE MARKETS. PEOPLE ARE ABLE TO BORROW AGAIN.WE HAVE EVERY CONFIDENCE THE UNITED STATES IS GOING TO GET BACK ON TRACK. AND I THINK YOU SHOULD TAKE COMFORT IN THE FACT THAT THE PRESIDENT AND HIS TEAM WAKE UP EVERY DAY, THEY COME IN HERE AND WORK AS HARD AS WE CAN TO DELIVER ON YOUR BEHALF.

QUINTANILLA: MS JARRETT IT'S GREAT HAVING YOU ON THE PROGRAM ON AN IMPORTANT DAY HAVE A TERRIFIC WEEKEND.I DON'T KNOW IF YOU GET WEEKENDS. BUT ENJOY IT NONETHELESS. JOINING US FROM THE WHITE HOUSE LAWN.THANK YOU VERY MUCH.

JARRETT: THANK YOU. TAKE CARE.