The Federal Reserve - Some background and perspective

In their "Breakdown" podcast, American Prospect blogger Matt Yglesias and The Nation's Washington DC editor Chris Hayes explain much of what you need to know about the Federal Reserve, the most obscure and murky enormously powerful institution in the country - and one which isn't easy to understand in terms of its central role in the economy.  Listen HERE.

Current & former Fed Chairs, Bernanke & Greenspan

"I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant" - former Fed Chairman Alan Greenspan.

After listening to the Yglesias/Hayes podcast, if you want to dig deeper, follow up with Yglesias' useful article HERE in "Democracy" on why progressives should pay more attention to the Fed.

"Money quote" as to why we should care?

Climate change, health care, labor unions, women’s rights, gay and lesbian equality, and poverty, among other causes, all have their advocates. And faced with an economic downturn, fiscal stimulus is an appealing prospect to liberals. After all, it offers a political free lunch—an opportunity to spend money on key priorities without doing the tough work of coming up with offsetting tax increases. And it’s easy enough to dial around to a dozen interest groups and come up with a laundry list of stimulative fiscal measures. But the vast majority of recessions are fought primarily with monetary tools rather than fiscal ones. And even in especially steep downturns, fiscal policy can work as a stabilization tool only to the extent that monetary policy accommodates it. What’s more, most liberals claim to care about things like wage stagnation but seem to have remarkably little interest in the institution charged with determining when “too much” increase in compensation is risking inflation.

 Via Rortybomb.