Federal Reserve Chairman Ben Bernanke appears before the Senate Banking Committee to explain why he believes Congress should adopt President Bush’s $700 billion intervention plan designed to rescue financial institutions affected by the housing market.

Discussion Questions

1. What is the role of the Federal Reserve Chairman? Click here for some background information on the Senate Banking Committee’s hearing on President Bush’s intervention plan. Which members of President Bush’s cabinet helped the president create the $700 billion intervention plan?
2. Explain why Chairman Bernanke testified before the Senate Banking Committee. Why does he believe the financial markets, “are not serving the necessary functions to support the economy"? According to the Chairman, what will happen if Congress does not implement the $700 intervention plan?
3. Click here to watch President Bush’s address to the nation on the evening of September 24, 2008, urging Congress to support his intervention plan. What factors does the president say led to the current financial crisis?
4. Extended Activity: Research the arguments supporting and opposing federal intervention in the financial markets. After watching the clips above and conducting your research, explain why you believe Congress should or should not adopt the president’s intervention plan.