[via NYT] looks like obama is going the Other way drumming up the importance of the selection of the next chairman. But below analysis seems reasonable.
Where the Fed must be held more accountable is for its oversight of banks. It is banks, not the government, that effectively create most of the money we use, by extending credit where it is most needed. As we've painfully learned, banks can over-lend and even set off an economic collapse.
Before the crisis the Fed seemingly lost all capacity for the painstaking, boots-on-the-ground supervision of the banks under its purview. And, effective or not, top-down monetary interventions remain attractive to the Fed's top brass. Running what amounts to a hedge fund on steroids is more glamorous and exciting than managing a regulatory bureaucracy. Perhaps the most important qualification for the next Fed leader is one all too rare in Washington: humility.
Before the crisis the Fed seemingly lost all capacity for the painstaking, boots-on-the-ground supervision of the banks under its purview. And, effective or not, top-down monetary interventions remain attractive to the Fed's top brass. Running what amounts to a hedge fund on steroids is more glamorous and exciting than managing a regulatory bureaucracy. Perhaps the most important qualification for the next Fed leader is one all too rare in Washington: humility.
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