The Federal Reserve was established in 1914 as independent of the president and Congress—and for good reason. The Fed's founders understood that politicians had to be blocked from using monetary policy to juice the economy before elections. Extensive research supports the wisdom of the Fed's political independence; monetary policy works best when it is insulated from the vagaries of election cycles.

The problem is that while the Fed is largely independent of politicians, it is intimately connected, and even answerable, to the...