This is really the crux of the problem. There’s a trade-off between the ability to respond to crisis and the concentration of power. This is why China (large country with strong central government) was able to enact their fiscal stimulus so quickly and so effectively some months ago. The opposite is true for most of Europe (a hodgepodge of smaller states acting independently of each other). In the United States, our desire for change propelled Obama into the White House, while at the same time, our suspicions of concentrated power bind his hands. His predecessor, President Bush, got an unfairly bad rap for his handling of Katrina for this reason, as well.

Perhaps I’m being naive, but I fail to see evidence of the FOMC (let’s face it, the only part of the Fed that really matters) acting in Wall Street’s best interests to the detriment of the public.

Direct democracy is not unilaterally the ideal form of government. This is why we have appointed officials, capable of rising above the occasionally irrational masses.

Well written piece, Mr. Thoma.