August 26, 2011
Morning Edition had a piece on the Federal Reserve Board’s annual meeting at Jackson Hole. The segment included a comment from an analyst (link not available yet) saying that we are seeing the risk of political interference undermining good Fed policy.
This would have been a great comedic comment, if it were not said in complete earnestness. This is sort of like worrying that the performance of the Federal Emergency Management Agency would deteriorate after the departure of Michale Brown, except the damage caused by Brown’s incompetence was trivial compared to the enormous suffering that has resulted from the Fed’s incompetence.
The Fed (i.e. Alan Greenspan and his then sidekick Ben Bernanke) sat back and let the housing bubble grow to ever more dangerous levels. It possessed all the tools necessary to rein it in but chose to do nothing. This is like a school bus driver drunkenly swerving into oncoming traffic and killing all aboard. Incredibly, in Federal Reserve Board land, the driver comes to work the next day and no one says anything.
Yeah, we should worry that it gets worse than this!
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