Ben Bernanke had much to do before Congress today.
He needed to provide some encouragement that an economic recovery is either underway or on the way, and he did say that some growth should occur later this year, though not enough to reduce the unemployment rate.
At the same time, he insisted that once a recovery takes hold, the massive sums the Fed has been pumping into the economy — cash it has simply created — can be withdrawn quickly and smoothly to avoid an outbreak of inflation.
If anyone can pull off such a feat it is probably Bernanke. He certainly acted quickly to pump up the money supply when the dimensions of the banking crisis became evident and the current deep recession loomed. This guy is decisive and fast. But remember: It is the Fed's traditional independence from the rest of the government, and especially from Congress that enables it to be decisive and fast.
Now though, there is a new round of calls for greater oversight of the Fed, in the form of greater access to its books by Congress. It sounds reasonable enough, but it is unmistakably an effort to give politicians greater say in interest rate policy.
Some members of Congress now blame the Fed for keeping rates too low for too long and feeding the real estate bubble. But there weren't many lawmakers calling for higher interest rates at the time, and there won't be many cheering Bernanke on when he eventually has to raise them again to head off inflation.
— Brit Hume is the senior political analyst for FOX News Channel.