Critics say the Fed should have tried harder [in 2004-2005], raising rates sooner and faster. Mr Greenspan counters that that would not have been acceptable “to the political establishment” given the very low rate of inflation. He says “the presumption that we were fully independent and have full discretion was false.”
Completely aside from the interest rate decisions, I would like to please know which elements of the political establishment had control over the Fed and how those elements exercised that control in 2004-2005. Specifics. George Bush? Dick Cheney? Harry Reid? Nancy Pelosi? The Supreme Court? Michael Brown at FEMA?
From the Financial Times.