Just to note an important fact about the FOMC that has been overlooked. The members of the Board of Governors are not untouchable by the political system as we have sometimes been lead to believe. The following is the text of public law, Title 12 Unite States Code Sect. 242 that states the Federal Reserve Board Members can be removed by the President of the United States for cause.
It doesn’t say what “cause” means – but I think insisting upon policies that cause a sequel to the Great Depression should be reason enough. And so now we know who is ultimately responsible for the actions of Bernanke and company since late January 2009.
12 USC §242 – Ineligibility to hold office in member banks; qualifications and terms of office of members; chairman and vice chairman; oath of office:
The members of the Board shall be ineligible during the time they are in office and for two years thereafter to hold any office, position, or employment in any member bank, except that this restriction shall not apply to a member who has served the full term for which he was appointed. Upon the expiration of the term of any appointive member of the Federal Reserve Board in office on August 23, 1935, the President shall fix the term of the successor to such member at not to exceed fourteen years, as designated by the President at the time of nomination, but in such manner as to provide for the expiration of the term of not more than one member in any two-year period, and thereafter each member shall hold office for a term of fourteen years from the expiration of the term of his predecessor, unless sooner removed for cause by the President. Of the persons thus appointed, one shall be designated by the President, by and with the advice and consent of the Senate, to serve as Chairman of the Board for a term of four years, and one shall be designated by the President, by and with the consent of the Senate, to serve as Vice Chairman of the Board for a term of four years. The Chairman of the Board, subject to its supervision, shall be its active executive officer. Each member of the Board shall within fifteen days after notice of appointment make and subscribe to the oath of office. Upon the expiration of their terms of office, members of the Board shall continue to serve until their successors are appointed and have qualified. Any person appointed as a member of the Board after August 23, 1935, shall not be eligible for reappointment as such member after he shall have served a full term of fourteen years.
PS: Obama needs to fire Bernanke – we’ve waited long enough for him to fix the mistakes and we’re getting very little progress. I’m sure Bernanke is a great guy on a personal level, but he doesn’t belong where he is.