There has not been much critique of the latest Fed move, the ninth since August, to fix the ailing credit market. We would like to remedy that with the following observation.
The Fed cannot possibly continue to argue that it has given Americans and their policy makers a fair and accurate picture of the economy while making these frequent, unprecedented and horrifically costly interventions.
Americans are not passive and unaffected bystanders in what the Fed does or does not do. They are stakeholders who are entitled to assess its performance and whether it is ultimately acting in the public interest. That means more than what might be expedient for financial institutions, mortgage lenders and hedge funds that are struggling with the consequences of their risk misjudgments and still do not appear to understand the extent of their own folly.
Straight talk, not Fed speak, needs to be part of the intervention, too.
Update: The Fed’s move made a lot of money for some investors and company insiders. The stock of Countrywide Financial, for instance, a big player in the subprime mess, soared 17 percent for the day (Tuesday).
Some of these remarks were posted on The New York Times blog of Floyd Norris, one of our favorite commentators .