Federal Reserve “independence” is a convenient untruth for the Fed and for many in the Washington political class. The Fed is absolutely influenced by politics. This is evident even to the fairly casual observer.
(From The Dallas News)
Carnegie Mellon University’s Allan Meltzer, a distinguished monetary economist, had this to say about Fed policy during the crisis: “Under Mr. Bernanke, the Fed has sacrificed its independence and become the monetary arm of the Treasury.”…
…Bernanke’s Fed seemed to care just as much about the health of prestigious financial houses as the state of the economy. This is unsurprising, given pressure from elected officials, who often have cozy relationships with Wall Street.
The Fed is there to backstop the banks, which it has done at great cost to the overall economy. JP Morgan and Goldman Sachs are doing great. Hope the same can be said for your family.
Few entities have as much influence over our lives as the Federal Reserve. The ability to set interest rates, to set the price of rented money, is immense power. This power attracts those who want power. It’s only natural.
By the way, if one is interested in learning what the Fed really is all about I highly suggest watching the below video from Murray Rothbard.