Fed Up

The Bearded Finance Wizard speaks:

The Federal Reserve and other central banks must protect their ability to make key economic decisions free from political interference, Fed Chairman Ben Bernanke said Wednesday.

[...]

Politicians generally prefer holding interest rates low, which stimulate the economy and hiring.

"Such gains may be popular at first, and thus helpful in an election campaign, but they are not sustainable and soon evaporate...," Bernanke said

"Thus political interference in monetary policy can generate undesirable boom-bust cycles that ultimately lead to both a less stable economy and higher inflation."

I was always under the impression that it was the Fed that completely abdicated its responsibility in fighting a number of speculative bubbles over the past two decades, fueling the fire with pervasive, low interest rates. These comments were made in reference to the number of legislative items in Congress right now calling for greater oversight of the Fed. If political oversight leads to undesirable boom-bust cycles, then what's the excuse for our recent economic history?