I know of few descriptive terms more harsh than classifying an individual or organization as being ignorant.
Yet that is exactly how The New York Times labels the most powerful institution in the world, that being the Federal Reserve, after reviewing the recently released minutes from the Fed’s meetings back in 2008.
The hundreds of pages of transcripts, based on recordings made at the time, reveal the ignorance of Fed officials about economic conditions during the climactic months of the financial crisis.
Serving as a Fed official is not a part time role akin to committing one’s time for a local civic organization. In fact, perhaps not fully appreciated by many in our nation, the Federal Reserve not only serves as our nation’s monetary authority but also as a primary regulator for our nation’s banking system.
Given the Fed’s prominent position in our nation and the global economy, the following questions regarding the Fed’s “ignorance†are screaming to be addressed:
1. Was the Fed’s ignorance due to a lack of basic intellect and understanding of the degree of leverage that had built up in the system after the net capital rules on Wall Street had been relaxed?
2. Was the Fed then and still now so closely aligned to the major banks in our nation so as to lack the proper perspective and oversight of these institutions?
3. Was the Fed hoodwinked, manipulated, or possibly outright lied to by the banks it is charged with overseeing?
4. What about the Fed’s interaction with other banking regulators, including the OCC and SEC primarily? Was there a ‘failure to communicate’ between these regulatory bodies?
5. In summation, is the Federal Reserve simply another regulatory body captured by Wall Street?
These questions need answers. Who is charged in getting them? Congress. Will they or have they? Never.
We all pay an enormous price as a result.
I strongly maintain that a full five years after the crisis that crippled our global economy the lack of transparency on the topics referenced within these questions remains one of our nation’s greatest problems.  The crux of the problem centers on the fact that the same ‘ignorant’ folks who failed to perform and protect our nation pre-crisis have been in place since then.
