WSJ calls the Fed's dual mandate Bipolar

They are right.  How does an increase in the amount of dollars available get everyone working again?  I understand how multipliers work, and I don't have too much faith in them. 

The context of this is Geithner's recent statements to keep politics out of the Fed.  Geithner has stated that the white house is against ending the Fed's dual mandate, which means that it would likely get a White House veto.  In that case, it is doubtful that they could get the 2/3 majority that it would require to override the veto.

Via WSJ:
The larger problem with the dual mandate is that it inevitably makes the Fed a political actor. Fed governors are forced to pretend they can be economic saviors, able to rescue workers and business from the consequences of failed fiscal and regulatory policies. This is precisely what the Fed is being asked to do today, using QE2 to save the Obama Administration from a 9.6% jobless rate despite trillions spent on economic stimulus, foreclosure mitigation and cash for clunkers. Mr. Bernanke has too often made the Fed appear to be an agent of the Treasury, as he did again yesterday in Frankfurt by blaming China's pegged currency for U.S. economic ills.

The irony is that critics of QE2 are being portrayed as enemies of Fed independence, when the truth is the opposite. Ending the dual mandate would liberate the central bank to focus on the single task of stable prices, which is hard enough in a world of fiat money and no formal price rule. Mr. Greenspan once understood this and urged Congress to repeal Humphrey-Hawkins.

Geithner opposes ending the dual mandate
Geithner politicizes the Fed and warns congress not to do the same


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