Playing Politics Could be Federal Reserve’s Downfall

Tuesday, November 16, 2010; 12:30 AM

I started to write an ironic, playful column comparing the Federal Reserve’s decline to that of Yankees’ shortstop Derek Jeter. Both are still pretty good compared to what else is out there, but they’re sure not what they used to be.

But the more I thought about the problems the Fed is having these days, the more I realized that what’s going on isn’t funny. It’s creepy.

A group composed largely of Republicans is running an advertising campaign against the Fed’s program of buying $600 billion of Treasury securities, and some Democrats are defending the program. Just before that ad campaign was announced, one of the Fed’s highest-profile governors, Kevin Warsh (more on him later), who had voted for the program, publicly questioned it – something I’ve never seen happen before.

Continue reading here.