One of the central myths of our financial system is that the Federal Reserve enjoys "independence" from the federal government. The public can trust Bernanke to create hundreds of billions of dollars out of thin air, and give them to whomever he pleases without even telling Congress the details, because the Fed chair is a pure scientist and technician, uncorrupted by politics.

Yeah right, and Greenspan admits it in this interview (HT2EPJ):

“If we tried to suppress the expansion of the subprime market, do you think that would have gone over very well with the Congress?” Mr. Greenspan said. “When it looked as though we were dealing with a major increase in home ownership, which is of unquestioned value to this society — would we have been able to do that? I doubt it.”

I loved this excuse too:

The Fed’s “easy money” policy created an excess of cash that inflated equity and asset prices, leading to both the technology bubble of the late 1990s and the housing bubble in this decade.

While Mr. Greenspan acknowledges that he could have done something to avert the housing crisis, he contends his hands were tied.
...
Mr. Greenspan said that if he had taken steps to prevent the crisis, the outcome would have been painful.

“We could have basically clamped down on the American economy, generated a 10 percent unemployment rate,” he said. “And I will guarantee we would not have had a housing boom, a stock market boom or indeed a particularly good economy either.”

Is the economy "particularly good" right now? Does Greenspan go to the dentist when he has a toothache, or does he take an aspirin and explain that those office visits are painful?