[bd_at_rivenhill]

The Fed is not entirely independent of "dumb politicians" since it targets both inflation/deflation and unemployment. When politicians make exceptionally stupid decisions, such as borrowing too much money which results in a bubble of productive overcapacity that then pops and produces excess unemployment, then the Fed has to react by devaluing the dollar to bring unemployment under control. It would be preferable for it to have an adversarial relationship with the politicians in which it would raise interest rates when fiscal policy starts to get out of control in order to make sovereign borrowing too painful past a certain predefined level (such as a percentage of GDP) but this seems unlikely given that politicians are responsible for nominating and confirming Fed governors.

[NHQ]

I never thought of that. That's kind of staggering. We should be electing the fed.

[bd_at_rivenhill]

No, we shouldn't. Politicians have a very long and impressive history of running up excessive debts and then printing their way out of them. The Fed was created from a careful compromise between loose money and sound money interests, and could probably do with a bit less interference from the political class. As someone who works hard and saves carefully for retirement, I would prefer to avoid to have the risk that my investments would be devalued in real terms at some point in the future because the two main political parties in US over the last couple of decades seem to view compromise as the act of raising spending, cutting taxes, and borrowing money.