The Fed's Independance

Fourteen months ago the financial crisis paralyzed more than just the economy: it also paralyzed Congress. In a heroic act of stupidity, Congressmen embarked upon the usual he-said, she-said blame game refusing to take any action to help the economy. A single entity stepped into the vacuum that Congress left in its wake: the Federal Reserve. Congress did not know how to do with the crisis and almost made things worse by not passing the TARP legislation. The Federal Reserve acted efficiently and aggressively to right the tipping ship and has reaped solid results so far.

What kind of response do they get from the very Congressmen that were scared into a cave last September? Dodd, Frank and Obama have each proposed legislation that would strip the Federal Reserve of some of their power! Easily worse than the others is Dodds plan which seems to implicitly blame the entire crisis on the Federal Reserve. Dodd proposes taking away all of Fed's regulatory power, handing these powers over to an organization that is brand new and will look something like the SEC or FDIC. These organizations do not have the culture or history needed to properly regulate the financial system. In reality, all that needs to take place is an updating of the Fed's duties.