By massively expanding the Feds balance sheet with mortgage bonds the Federal Reserve massively increased the value of housing and lowered mortgage payments for existing homeowners. Prior to 2008 the Fed only bought US government securities so any market distortions it caused the benefit accrued to the Government.
As the Fed is now having to pay interest on reserves and higher inflation it is making the cost of those decisions more apparent.
Now, if Congress had said in 2008 that they wanted to write checks for a a couple of trillion dollars per year to homeowners and pay for it with a 10% tax (inflation) that would mostly benefit the old and wealthy and hit the young and poor the hardest they would be within their constitutional power to do so. It is unlikely that Congress would ever do so but the Federal Reserve made that decision. That makes me uncomfortable.
It's not as if any of those previous financial crises are comparable to what we're going through now though. These are very different times where we're coming out of unprecedented events. Maybe the Fed really is doing poorly, but I can't exactly remember a time in my life when everybody loved the Fed and what they were doing either. Is there some kind of golden age when everything was being handled correctly and we didn't have problems that we should be trying to go back to?
In the early 20th century we fought two World Wars. The only thing unprecedented is the scale of the Fed’s operations these days.
If there is any institution that should be under constant and heavy scrutiny at all times, it should be the Fed.
First, I want to say that I agree with you 100% here. I even think maybe the accountability mechanisms might not be designed correctly, although I don't know enough to be sure.
> half the people actually defend them
In their defence though (and notwithstanding what I said above), they're all incredibly intelligent and competent professionals who happen to be at the helm of the ship in uncertain times. :shrug:
It'd be interesting to understand how and why. That's not true of all institutions without oversight.