That’s a great timeline! You need to write an article on that. 😉
So, your more detailed analysis makes sense. We have had courageous Federal Reserve leaders. If the Fed could somehow create a prioritized goal to *minimize* the need for tinkering around with interest rate changes and balance sheet expansion, I would be very happy. Until then, I think the end result of the Fed’s centralized planning for the economy is to support asset prices (now at the expense of people who own little to no assets).

I do not defend Greenspan’s Fed; despite his current positive reputation, in his 18 years he seemed to me to fall farther and farther behind in understanding what was going on in the economy – and he was an avowed enemy of regulation of any kind, culminating in 2000’s removal of firewalls between insurers and shadow banks. That removal directly resulted in the devastating 2008 crash and the fragility seen ever since, which force the Fed to constantly intervene, as you recognize in your article.

I defend Bernanke’s Fed. He had to be courageous and creative to save the banking system. He did so, and worked with Dodd and Frank to get Congress to pass regulations that got the known sources of excess under control.

I defend Yellen’s Fed. She carried on Bernanke’s work, gradually sunsetting the emergency props he created and continuing to improve the Fed’s regulatory function. Had Trump reappointed her to continue running the Fed, I have no doubt she would have ignored his pressure to continue “lower for longer” in 2018, and also would have worked with Congress to balance the fiscal and monetary responses to the pandemic, which would have reduced the amplitude of the economic volatility those responses induced.

I cannot defend Powell’s Fed; he has made mistake after mistake. He blundered by capitulating to pressure from Trump to reverse course and lower rates when Powell had started a completely appropriate gentle raising regime. He blundered by failing to use Biden’s regulation-friendly Congress to restore the Fed’s lost authority to force very large banks to meet appropriate systemic importance standards. He blundered by failing to account for Congressional fiscal pandemic responses, exacerbating spikes in monetary liquidity and savings rates, which were the reason the transitory inflationary effects caused by supply chain disruptions morphed into multiple inflationary feedback loops last year. And he blundered by responding to that inflation with faster Fed Funds rate increases than the weakest banks could tolerate.