Ben Stein wrote an excellent article in this Sunday's New York Times. He compares the Federal Reserve to the 3 Stooges. They just don't get it and keep hitting the wrong person in the head.
http://www.nytimes.com/2008/01/13/business/13every.html?_r=1&scp=1&sq=ben+stein&oref=slogin
Mr. Stein argues that the Federal Reserve has been reluctant to cut rates deeply and quickly enough due to worries about oil-fueled inflation. But he correctly points out that none of the reasons that oil, and as a corollary, food prices due to the ethanol boondoggle, are in the control of the Federal Reserve.
They cannot affect these elements of inflation. But they can provide the credit the economy needs to reaccelerate. The Fed can do more to convince the banking system that they "have their back" so the banks can lend with confidence.
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