I wouldn’t get too bent out of shape over the governance of the Federal Reserve. Yes, it’s a very important institution. Yes, it can theoretically act against the wishes of Congress and the White House. But I think we all know that the Fed cannot really go up against those entities. On the margins, it can act against the wishes of Congress/WH, but that’s about it.
Just imagine if Bernanke had a conversion experience and adamantly opposed any bailout for irresponsible institutions or people. He would be summoned before Congress within 24 hours. If the public humiliation before Dodd, Frank, Schumer et al failed to produce results, his power to block any bailout would be removed within a week.
Congress is the key. The WH is less important, and the Fed is down the list quite a way, important as it is.
