Why the Fed Needs Defending
As Janet Yellen pointed out to Congress last month, the financial statements of the Fed’s board of governors and the regional reserve banks are already audited by independent accounting firms. And which other agency, after each meeting of its leaders, immediately announces the decisions it has taken and, a few weeks later, publishes a detailed summary of its discussions? Now, within about six years of its meetings to address the financial crisis, the Fed has published verbatim transcripts.
Do we know what was said in the White House when George W. Bush decided to invade Iraq? When Barack Obama decided to pull out virtually all U.S. troops from the country? Or what was discussed inside the Treasury Department when the then Secretary of the Treasury, Henry Paulson, decided to let Lehman Brothers sink? Of course we don’t. But, thanks to the Fed transcripts, we know exactly what Yellen said in March, 2009, when some Fed officials were worrying that the central bank might be trying to do too much. ”The economy is just a disaster area,” Yellen said. “In light of the outlook I would want to do everything we can.”