For some time now it has been my view that a conflict would develop between the President and the Federal Reserve concerning the Fed's tight monetary policies. Press reports in recent days suggest that this conflict has begun. This, of course, raises the issue as to whether the Federal Reserve should be an independent agency or not.

Virtually every commentator on the subject argues that agency should have this status.

It is interesting to note that the founders of the Federal Reserve did not share this view. There was a multi-year battle at the time the Fed was created that lasted literally from 1907 to 1913. The conflict centered around the issue that an independent central bank would be run by bankers to the detriment of the nation and, therefore, the Fed, if created, should not be independent.

Roger Lowenstein, in America's Bank has done a superb job detailing this battle. Edward Griffin wrote the popular book The Creature of Jekyll Island, which in my view was poorly done, but clearly lays out the argument against an independent Fed. Moreover, Liaquat Ahamed in his masterful book Lords of Finance details how a small group of central bankers in the 1920s may have made decisions with disastrous results for the world economy.

The Financial Crisis Inquiry Commission created by Congress immediately following the crisis wrote a scathing indictment of a Fed that clearly did not see or understand that the system that it was entrusted to protect was melting down. Plus, many current Fed viewers, myself among them, believe that the Federal Reserve's policies following the crisis may have benefited Wall Street far more than they did the national economy.