How much of what the Fed does is controlled by its political leaders? Peter's book makes a case for "less than you would think," and I am generally persuaded by such stories. He's got some great color here. The general counsel of the Fed, for example, has held that job for about two decades, and you'd never see that anywhere else in Washington. Ted Truman, the head of the Division of International Finance, was the person who did the Fed's international relations, occasionally in consultation with the Chair. Truman "thought he was the guardian of the gate," observed on Fed governor, with a tone of what sounds like frustration. Peter documents how influential these "barons" of the agency are in setting policy. And that doesn't even get into the ways that economists can moderate the range of acceptable choices to be made in places where it does look like the political leaders of the Fed play an important role - monetary policy.
It all rather reminded me of this.