Failing Upward, Federal Reserve Edition
Reports that the Federal Reserve is winning the political battle to gain new regulatory powers over financial firms prompts American Enterprise Institute scholar Alex Pollock to ask:
Isn’t this the same Fed which helped inflate the great housing and mortgage bubble, denied that bubbles could be identified or stopped, promoted the unfortunate Basel II capital regulations, was very late to recognize the seriousness of the mortgage collapse, and then had to take extraordinary measures in the ensuing panic? Yes, of course it is. But coming out of economic and financial messes with enhanced power is part of the Fed’s mystique.
Why does the Fed always win? Pollock: “… it may simply be the extreme usefulness to politicians of being able to print money.”
