The Federal Reserve was set up originally as an independent body to so that it would be free of being influenced by the winds of political opinion. Robert Reich made the point recently in his blog that the Federal Reserve has committed 2.5 trillion dollars thus far to rescue our financial system from its credit seize up and from the black hole in the housing market. Most of the Fed's actions are being done behind closed doors. This is all in the name of the "monetary ease" to which Fed Chairman Bernanke referred in a speech on February 18, 2009. I agree with Reich that the bailout process is hardly transparent, as the true eventual cost for which taxpayers may be on the hook is unknown.

But I certainly would rather have Bernanke as Fed Chairman, relatively independently use the monetary tools at his disposal to restore credit flows than the President or members of Congress who must stand for election and be subject to the temporal whims of electoral campaigns. Remember, it was some of those same members of Congress, including Barney Frank, who ignored Republican warnings about Fannie Mae and Freddie Mac in the 1990's, and saw nothing wrong with the latter's landscape before the subprime loan problem blew up into the credit crisis in 2008.
 
That the Fed has invested this much money to restore the flow of credit again so essential to our economic recovery may be beneficial in my opinion. Of course, the Federal Reserve has been far from perfect. I believe that excessive printing of money under the Bernanke regime may lead to much greater inflation in the coming years, and that the current whiff of deflation we see in early 2009 as a collapse in commodities' prices will be a memory. The increasing price of gold as it moves toward $1,000 per ounce may be an indicator both of current economic distress and future inflation.
I write about this in my article: Will the U.S. Suffer an Inflation or Deflation in 2009-2010, (or Both)?
 
By the Way: An acquaintance of mine believes that the Obama administration was far from transparent in the campaign and thus far into the President's term. Conspiracy theories aside for the moment, it seems the big danger in the economic Obama recovery plan as it concerns the banks is that the concentration on helping mortgage holders renegotiate their contracts will not help the banks' profitability and permit them to lend money to individuals and businesses based on profits. The extent that the large banks are lending now may be a function of the flow of government handouts. Not good, since it is not certain how the government will manage this unseemly relationship.