Experts Tell Congress to Lay Off the Fed

Like politicians don't cause enough trouble, now they are going after the Fed and their ability to govern monetary policy (which frankly, I typically wouldn't have a problem with except the fragile state of our economy).

History lesson:

The Federal Reserve Board was established by an Act of Congress and signed into law by President Wilson in 1913. Since then, the powers of the Fed have increased and broadened through many Acts since that time.
Its charge is to implement monetary policy through a central bank. It does this through its control over the federal funds rate—the rate at which depository institutions trade balances at the Federal Reserve (which at this point in history, is at its lowest level - near zero).

It exercises this control by influencing the demand for and supply of these balances through the following means:

1. Open market operations—the purchase or sale of securities, primarily
   U.S. Treasury securities, in the open market to influence the level of balances that depository institutions hold at the Federal Reserve Banks
2. Reserve requirements—requirements regarding the percentage of certain deposits that depository institutions must hold in reserve in the form of cash or in an account at a Federal Reserve Bank
   Contractual clearing balances—an amount that a depository institution agrees to hold at its Federal Reserve Bank in addition to any required reserve balance
3. Discount window lending—extensions of credit to depository institutions made through the primary, secondary, or seasonal lending programs

How will they change? What is the function that they failed at? Was it their lack of oversight of the financial institutions that were lending money like banshees to anyone that had a pulse? Is this the job of the Federal Reserve, or to other agencies?

This is something I'll be watching with great interest as it's effects are far-reaching...

Grace & Peace

PLW