Digging a deeper hole

This astonishing display of madness should settle the question about who runs the country, Washington or Wall Street:

Just a few months ago, amid populist anger at the Fed for failing to prevent the financial crisis of 2008 and bailing out Wall Street, Congress was talking of stripping the central bank of its supervisory oversight of banks or forcing it to submit to congressional audit of its interest-rate decisions.

Instead, the new law gives the Fed more power and a better tool box to help prevent financial crises. It will become the primary regulator for large, complex financial firms of all kinds, such as American International Group, the insurer which built a massive derivatives portfolio that regulators didn’t see until it was too late.

So, the Fed created the debt boom, which led to the subsequent credit crunch and the initial stages of Great Depression 2.0. And rather than auditing the central bank, Washington has elected to give it more powers. This should end well.