I’m writing my thesis on how the Fed was politicized during the panic of 2008. Is what I’ve written below (in bold) accurate? Is there is a credible source I could cite?
Recent events during the Global Financial Crisis indicate that the Fed became politicised. In 2008 Congress passed, and President Bush signed, the Emergency Economic Stabilization Act. This Act was a $700 billion stimulus package designed to stave off recession. Then in 2009 President Obama approved a further $787 billion in stimulus programs. Since raising taxes to pay for these programs would have been politically unpopular, the Fed supported Bush and Obama’s spending plans through the creation of new money. It faced pressure from administration officials to coordinate monetary policy with fiscal policy by lowering interest rates. A portion of the stimulus consisted of pork-barrelling aimed at appeasing congressional districts as well as special assistance to commercial banks, and as such, could be seen as the politics of favouritism.
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