In her fascinating book entitled "Fed Up," ex-Fed insider Danielle DiMartino Booth relates that "she was shocked to discover just how much tunnel vision, arrogance, liberal dogmas, and abuse of power drove the policies of the Fed." The book goes on to argue that "… a cabal of unelected academics … made decisions without the slightest understanding of the real world; just a slavish devotion to their theoretical models." She is referring to the years following 2008.

My personal experience with the Fed is certainly not close to that of Booth, but it was not contrary to her findings. For a number of years now, I have noted that the monetary thrusts being made by the Fed were being defeated by the regulatory thrusts made by the organization.

On the two occasions when I went to Washington to ask why this was happening, the answer I received was two-fold: The regulators make their decisions in order to resolve the problems in the banking system and the monetary authorities make their decisions related to the broader needs of the economy. I received no confirmation that these two groups within the Fed coordinated their actions to develop a consensus as to what would be best for the economy.

The net result is that the monetarists authorized three quantitative easings from 2008 to 2012, while the regulatory authorities kept raising the capital requirements of the banks. The net result was lower interest rates, which raised the value of financial assets, but there were no increases in bank loans that could have stimulated economic growth. The FDIC tells us from the first quarter of 2008 to the first quarter of 2014 loan growth in the United States was negative 0.5 percent – not per year but for the total six years.