[ti:Obama Nominates Bernanke for a Second ] [ar:Steve Ember] [al:Economics Report] [by:51VOA.COM] [00:00.00]This is the VOA Special English [00:03.22]Economics Report. [00:04.90]The government says [00:06.43]the United States economy shrank [00:09.36]at an annual rate of one percent [00:13.72]in April, May and June. [00:16.66]The decrease was less than expected, [00:19.70]and much less than [00:21.54]at the start of the year. [00:23.51]The improvement was partly the result [00:26.25]of increased government spending. [00:28.79]Another report on Thursday showed [00:32.33]a small drop in the number [00:34.44]of newly jobless workers last week. [00:37.98]There was also a drop [00:40.18]in the number of people [00:41.67]on long-term unemployment assistance. [00:45.19]On Tuesday, [00:47.28]President Obama nominated Ben Bernanke [00:50.68]for a second term [00:52.33]as chairman of the Federal Reserve. [00:55.43]His current four years end in January. [00:59.55]OBAMA: "Ben approached a financial system [01:01.70]on the verge of collapse [01:02.90]with calm and wisdom, [01:04.44]with bold action [01:05.93]and out-of-the-box thinking [01:07.38]that has helped put the brakes [01:08.98]on our economic freefall." [01:10.66]Ben Bernanke led the central bank [01:13.05]through extraordinary efforts [01:15.30]to contain the worst economic crisis [01:17.88]since the nineteen thirties. [01:20.18]But economists say [01:22.12]it may still be too early [01:24.49]to congratulate him [01:26.16]on rescuing the economy. [01:28.30]He is an expert [01:30.30]on the causes of the Great Depression. [01:32.84]Yet critics say he failed [01:35.62]to do his part to prevent the crisis. [01:39.33]He has critics in both parties. [01:42.55]Democrat Chris Dodd, [01:44.60]chairman of Senate Banking Committee, [01:47.36]says Ben Bernanke did not [01:50.29]act fast enough at the start. [01:53.08]And many Republicans criticize the Fed chief [01:57.55]-- himself a Republican [01:59.34]-- for what they see as too much spending. [02:02.51]He used the bank's power to create money. [02:07.06]The Fed established new lending programs, [02:10.55]and approved large purchases [02:13.05]of government securities [02:14.99]and mortgage-related securities. [02:18.04]But the president's decision [02:20.38]to renominate Ben Bernanke [02:22.52]for Senate confirmation [02:24.42]is considered a safe one. [02:26.56]In his second term, [02:28.56]he will have to consider how and when [02:31.46]to withdraw heavy intervention [02:34.41]in the financial industry [02:36.31]and raise interest rates. [02:39.15]The Fed has reduced [02:41.21]short-term rates to almost zero. [02:44.46]Heavy government spending [02:47.21]could cause inflation [02:49.20]unless officials find [02:51.45]just the right time to act. [02:54.18]But if they act too soon [02:56.84]and raise interest rates too much, [02:59.83]the economy could crash again. [03:02.97]The White House budget office [03:05.96]on Tuesday lowered its estimate [03:08.95]for this year's federal deficit. [03:11.46]The government will probably spend less [03:14.36]than it thought on the financial system. [03:18.76]The estimate for the next ten years, [03:21.83]however, is higher because the recession [03:25.39]was deeper than expected. [03:27.65]But even after the economy recovers, [03:31.59]the deficit is around [03:33.64]four percent of the economy. [03:36.24]And that, as the report notes, [03:39.20]is "higher than desirable." [03:42.23]And that's the VOA Special English [03:45.93]Economics Report, written by Mario Ritter. [03:49.52]Transcripts and podcasts of our reports [03:53.28]are at 51voa.com. I'm Steve Ember.