I may be wrong about this but, excuse me, why exactly is the president extending new powers to the Federal Reserve Board as part of his new proposal to reregulate the financial services industry? The New York Times doesn’t even bother to dig into this but The Wall Street Journal does:

The Fed emerges from the plan with the power to oversee from top to bottom almost any financial company in the country, including the firms’ foreign affiliates. It would also hand the central bank another victory by allowing it to oversee any commercial company that owns a banking charter known as an industrial loan company.

To soothe lawmakers unhappy with the Fed’s growing power, the proposal also recommends capping it in some ways. The administration proposes the creation of a consumer-protection agency, which would have the ability to write rules related to mortgages, credit cards and other consumer products, takes away powers previously held by the central bank.

   The problem here–and I would argue throughout legislative proposals to change the economic rules that led to the financial crisis–is that each piece of the changing landscape is seen on its own, as opposed to being a part of a puzzle. Putting aside the important fact that you could argue that the Fed played a very leading, and bad, role in the financial collapse (because that genuis Alan Greenspan stood by while the housing bubble grew and the derivative schemes multiplied under his watch), the Fed has misused its power, or at the very least, fails to enforce a critical part of our national policy:

   The job of the Fed, BY LAW, is to aim for price stability (mainly through its massaging of interests rates) AND–LISTEN UP–AND–LISTEN UP–bring about FULL EMPLOYMENT. Now, when has the Fed ever worked toward full employment in the past 30 years as a matter of policy? And when has the Congress, in the past three decades, ever pushed that hard on the Fed’s leadership?

   And why is that not mentioned in the president’s proposals? Why would we extend more power to an institution that isn’t even doing its most basic job?

   Sadly, because we accept unemployment, not to mention poverty and the reality of the masses of the working poor, as a reality. And that, my friends, is a national tragedy.