An English Central Banker's Opinion of Ben et al.

Refreshing blunt criticism of the Bernanke Fed by a former member of the Bank of England's monetary policy committee, Willem Buiter. After conceding that the BOE hasn't exactly been brilliant dealing with the crisis, he has a few choice things to say about Ben and his acolytes (emphasis mine):

"Throughout the 12 months of the crisis, it is difficult to avoid the impression that the Fed is too close to the financial markets and leading financial institutions, and too responsive to their special pleadings, to make the right decisions for the economy as a whole."

"Cognitive regulatory capture of the Fed by Wall Street resulted in excess sensitivity of the Fed not just to asset prices (the 'Greenspan-Bernanke put') but also to the concerns and fears of Wall Street more generally."

"Between the TAF, TSLF, the PDCF, the rescue of Bear Stearns and the opening of the discount window to (Fannie Mae and Freddie Mac), the Fed and the US tax payer have effectively underwritten directly all of the 'household name' U.S. banking system...and probably also, indirectly, most of the other large highly leveraged institutions."

"Although the Bernanke Fed has but a short track record, its too often rather panicky and exaggerated reactions and actions since August 2007 suggest that it also may have a distorted and exaggerated view of the importance of the financial sector for macroeconomic stability."

He also sees a "remarkable collection of analytic flaws" in general in the FOMC members and senior staff. This is as close to calling the FOMC a bunch of idiots as a central banker will ever come. Like a said, refreshing.