The Fed can only buy us a little time

But then things get weird for people who thought they understood what the Fed was, or what it did. Because the Fed is now offering to help large employers borrow new money directly, either as loans or through issuing corporate bonds.

Advertisement

Nor will it stop with large employers; the Fed has announced another announcement to come. Soon we’ll apparently get the details of a “Main Street Business Lending Program,” will support lending to small and medium enterprises. No one (including, I’m sure, the Fed) is quite sure how this will work. One thing is clear though: The Fed is becoming something closer to an actual bank rather than the central kind.

Obviously, in one sense, this is reassuring: Someone seems to be thinking primarily about what can be done to lessen the pain of this crisis, rather than squabbling and pointing fingers. In another sense, it is frankly terrifying, because it seems that the Fed, like many of us, has concluded that Congress and the White House may be incapable of acting fast enough to save the economy.

So the Fed has hoisted the pirate flag and sailed for uncharted waters. It will do everything it can to address the one problem our central bank might be able to fix, which is what you might call the “financialization of modern life.”

Join the conversation as a VIP Member

Trending on HotAir Videos

Advertisement
Advertisement
Advertisement