Over eighty years ago, Keynes condemned the rentier and welcomed his future disappearance. Following in his footsteps, politicians and central bankers today are ever closer to effectively bringing this about.
By announcing that it is willing to throw up to $1.5 trillion in electronically created money in order to give three-month loans to those institutions that bought Treasury debt earlier, the Fed is bailing out not only the holders of Treasury debt, but also the Treasury itself.
Although consensus building surely is an important and noble pursuit, one would think that it wouldn't really fall within the purview of a central bank president. It’s been clear for a long time that allowing politics to influence monetary policy carries significant and numerous risks.