If the economic slump has not yet prompted you to ask ?”Why exactly do we have a Federal Reserve?” ? you might want to check out Thomas Woods’ recent book Meltdown.
In the meantime, even those who don’t question the need for a government-controlled central banking system question the Fed’s ability avoid political pressure. Allan Meltzer discusses the problem in the new Fortune:
It’s reassuring that Fed officials are aware of the inflation risk,
but their program is unlikely to succeed. Much research shows that it
takes about two years for anti-inflation policy to work. That means the
Fed needs to start now and stick with it.I do not doubt the
Fed’s ability to control inflation; however, history warns that we
should be skeptical of the Fed’s willingness to sustain the program
when pressured to abandon it by so many powerful forces: Congress, the
Obama administration, the business community, and labor unions.Sustaining
the program requires accepting a temporary medium-term increase in
unemployment and interest rates and maintaining a degree of
independence that this Fed has not shown.
