WASHINGTON – Federal Reserve Chairman Ben Bernanke, a lightning rod for anger over Wall Street bailouts, is expected to overcome Senate opposition and win a second term as head of the nation's central bank.
The Senate has scheduled a key vote Thursday that will determine whether Bernanke has at least 60 senators on his side to beat a filibuster aimed at blocking his reappointment. Senate leaders from both parties expressed confidence he would prevail.
Still, the vote could be the slimmest for a Federal Reserve nominee, eclipsing the opposition to Paul Volcker in 1983, when he was confirmed for a second term by a vote of 84-16. No Fed chairman nominee has been rejected by the Senate.
The stock market has been rooting for Bernanke. The Dow Jones industrial average plunged last week amid news of mounting opposition, then recovered when his prospects brightened.
The Federal Reserve wields enormous power over American pocketbooks. It has the power to set interest rates that influence economic activity, employment and inflation. And it helps maintain economic stability by making emergency loans to banks when they can't get cash elsewhere.
"I believe that the chairman is going to be confirmed by a bipartisan vote," Senate Republican leader Mitch McConnell, R-Ky., said Wednesday.
Widely credited with avoiding a financial catastrophe, Bernanke has angered the public and lawmakers with his support of Wall Street bailouts — especially the $182 billion rescue of insurance giant American International Group Inc. The criticism has mounted as unemployment has risen to double digits and banks paid out huge bonuses to executives.
Critics also blame him for not detecting the coming crisis and failing to rein in the banking industry.
"He was asleep at the switch while Wall Street became a gambling casino," said Sen. Bernie Sanders, a Vermont independent who is among the senators in opposition.
The biggest challenge facing the Fed this year will be how and when to reverse course and raise interest rates. To foster the recovery, the Fed on Wednesday kept interest rates at a record low and pledged to hold them there for some time.
Though Bernanke may overcome a filibuster threat with 60 or more votes, his support on the final confirmation vote will probably be smaller. Several senators have said they would oppose blocking a vote on his confirmation but would vote against his reappointment.
Sanders stopped short of conceding that Bernanke would win the vote, but he said the close tally would send a message to President Barack Obama.
The confirmation fight and the attacks on the Fed have become a test of central bank independence. The Fed jealously guards its autonomy as a crucial element for carrying out monetary policy, even if it isn't popular with politicians.
Bernanke, 56, was first tapped by President George W. Bush to run the nation's central bank. Obama picked him for a second term in August. His term expires Jan. 31.
Most of his professional career was in academia. He spent 17 years teaching economics at Princeton.
Bernanke came to Washington to take a job at the Federal Reserve, working with then-Chairman Alan Greenspan. Bush selected him to be his top economist. After that, he went on to run the Fed, starting in 2006.
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TOKYO – Toyota Motor Corp. said Thursday it will recall an additional 1.09 million vehicles in the United States over problems with gas pedals and floor mats — a fresh blow to the world's top automaker as it struggles to salvage its safety reputation.
The new recal would affect five models — 2008-2010 Highlander, 2009-2010 Corolla, 2009-2010 Venza, 2009-2010 Matrix, and 2009-2010 Pontiac Vibe, Toyota said.
The announcement came just a day after Toyota said it would suspend U.S. sales of eight models — including the Camry, America's top-selling car — to fix faulty gas pedals that could stick and cause acceleration without warning.
Last week, Toyota issued a recall for the same eight models, affecting 2.3 million vehicles. In late 2009, Toyota recalled 4.2 million vehicles over concerns that floor mats could bend across gas pedals, causing sudden acceleration.
The sales suspension in the U.S. — Toyota's biggest market — could endanger the company's fledgling earnings recovery. Toyota only returned to the black for the July-September quarter with net income of 21.8 billion yen ($241 million) after three straight losing quarters.
Investors continued to dump shares in the global auto giant Thursday. Toyota dropped 3.9 percent to 3,560 yen even as the benchmark Nikkei 225 stock average gained 1.6 percent to close at 10,414.29. Toyota tumbled 4.3 percent Wednesday.
"It is still uncertain how this recall problem will affect Toyota's profits. But investors are worried it could really pressure the company's overall earnings," said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd.
Fitch Ratings warned Thursday the massive recalls and sales suspension could dent Toyota's recovery, especially in the vital U.S. market.
Fitch placed Toyota's credit rating of 'A+' on watch negative, meaning the rating could be downgraded. That could increase the interest rate Toyota pays on any debt.
"The recalls and sales and production suspension cast a negative light on Toyota's reputation for quality, just as the company emerges from an unprecedented downturn in the auto industry," Fitch said in a statement.
Toyota spokesman Hideaki Homma said Toyota decided to recall more vehicles due to the risk of accelerator pedals becoming stuck in the mats.
Toyota said in a statement it will fix or replace the accelerator pedals for the recalled vehicles to avoid the risk of floor mat entrapment. The company said it will replace floor mats as well for the latest recalled vehicles.
In March of 2007, Toyota started getting reports of gas pedals being slow to rise after being depressed for acceleration. Engineers fixed the problem in the Tundra pickup early in 2008.
But troubles persisted in other models, eventually leading to last week's recall and the plans to suspend sales and shut down of six factories while Toyota tries to fix the problems.
SAN FRANCISCO – Apple CEO Steve Jobs unveiled the company's much-anticipated iPad tablet computer Wednesday, calling it a new third category of mobile device that is neither smart phone nor laptop, but something in between.
The iPad will start at $499, a price tag far below the $1,000 that some analysts were expecting. But Apple must still persuade recession-weary consumers who already have other devices to open their wallets yet again. Apple plans to begin selling the iPad in two months.
Jobs said the device would be useful for reading books, playing games or watching video, describing it as "so much more intimate than a laptop and so much more capable than a smart phone."
The half-inch-thick iPad is larger than the company's popular iPhone but similar in design. It weighs 1.5 pounds and has a touch screen that is 9.7 inches diagonally. It comes with 16, 32 or 64 gigabytes of flash memory storage, and has Wi-Fi and Bluetooth connectivity built in.
Jobs said the device has a battery that lasts 10 hours and can sit for a month on standby without needing a charge.
Raven Zachary, a contributing analyst with a mobile research agency called The 451 Group, considered the iPad a laptop replacement, especially because Apple is also selling a dock with a built-in keyboard.
But Forrester Research analyst James McQuivey said he does not believe the iPad offered enough additional features for consumers to justify buying yet another gadget, or to call it a new category of device.
In an e-mail, he criticized its lack of social features, such as ways to share photos and home video and recommend books.
Sitting on stage in a cozy leather chair, Jobs demonstrated how the iPad is used for surfing the Web with Apple's Safari browser. The CEO typed an e-mail using an on-screen keyboard and flipped through photo albums by flicking his finger across the screen.
He also showed off a new electronic book store and a book-reading interface that emulates the look of a paper book. That puts the iPad in competition with
Tim Bajarin of Creative Strategies Inc. called the iPad a great multipurpose mobile device — and the first tablet with a chance of success with consumers.
But Bajarin said Jobs' presentation only touched the tip of what the iPad could do for newspapers, magazines and book publishers, three industries struggling in the transition to the digital age.
A new newspaper reader program from The New York Times and a game from Electronic Arts Inc. were demonstrated during the event. The iBookstore launched with titles from Penguin, Simon & Schuster, HarperCollins, Hachette Book Group and Macmillan, and will open up to other publishing houses.
Carolyn Reidy, chief executive of Simon & Schuster, called the iPad a "terrific device" that gives readers the ability to adjust the typeface and turn pages by touching a finger to the screen, as opposed to pushing a button, as the Kindle requires.
Applause rang out as Jobs stepped onto the stage to introduce the iPad to hundreds of analysts, bloggers and other guests at the Yerba Buena Center for the Arts in San Francisco.
Accompanied at times by executives from Apple and other companies, Jobs played showman throughout the hour-and-a-half presentation, slowly revealing details about the iPad. When he announced the price — lower than what had been speculated — it was accompanied by the sound of glass shattering.
Like iPods and the iPhone, the iPad can sync with Apple's Macintosh and Microsoft's Windows computers. Jobs said the iPad will also be better for playing games and watching video than either a laptop or the small screen of a smart phone.
Unlike a laptop, the iPad has an accelerometer, so gamers can tilt the device to control what's happening on the screen. And the iPad is lighter and easier to hold for long periods of time while watching a movie or TV show.
Its large screen makes it much easier to touch type than on a smart phone, and it is extremely responsive to finger swipes and taps for easy scrolling through Facebook, photo albums and news articles.
The iPad comes with software that includes a calendar, maps, and video and music players. All seem to have been slightly redesigned to take advantage of the iPad's bigger screen.
Still, tablet computers have existed for a decade with little success. Jobs acknowledged Apple will have to work to convince consumers who already have smart phones and laptops that they need the iPad.
"In order to really create a new category of devices, those devices are going to have to be far better at doing some key tasks," Jobs said. "We think we've got the goods. We think we've done it."
Applications designed for the iPhone can run on the iPad. Apple is also releasing updated tools for software developers to help them build iPhone and iPad programs.
"We think it's going to be a whole 'nother gold rush for developers as they build applications for the iPad," said Scott Forstall, an iPhone software executive.
The basic iPad models will cost $499, $599 and $699, depending on the storage size, when it comes out worldwide in March.
Apple Inc. will also sell a version with data plans from AT&T Inc. in the U.S.: $14.99 per month for 250 megabytes of data, or $29.99 for unlimited usage. Neither will require a long-term service contract.
The iPad models that can connect to AT&T's wireless network will cost more — $629, $729 and $829, depending on the amount of memory — and will be out in April. International cellular data details have not yet been announced.
Shares of Apple rose $2.04, or 1 percent, to close Wednesday at $207.98. The Cupertino, Calif.-based company's shares have more than doubled over the past year, partly on anticipation of the tablet computer. Shares in Amazon rose $3.27, or 2.7 percent, to $122.75.
Jobs, 54, a pancreatic cancer survivor who got a liver transplant last year, looked thin as he introduced the highly anticipated gadget, though he seemed to have more energy than at Apple's last event in September.
Apple had kept its latest creation tightly under wraps until Wednesday's unveiling, though many analysts had correctly speculated that it would be a one-piece tablet computer with a big touch screen.
AP National Writer Hillel Italie in New York contributed to this report.