Mark Thoma sends us to:
Christina Romer: 'The Fed Drives Best at Higher Speeds': The central bank has adopted a more aggressive monetary policy that could be very helpful to the recovering economy. But... the Fed’s commitment to its new policies appears shaky. Soon after the December meeting, some members of the policy-making committee spoke out against the action….
[P]essimistic views about ... expansionary actions have played a major role in limiting Fed moves over the last few years. Policy makers worry that such actions will do little good and that they could cause inflation, distortions in financial markets, and losses on the Fed’s portfolio. I can’t say for sure that those views are wrong today… But… in two periods when the Fed made terrible errors… the Great Depression of the early 1930s and the high inflation of the early and late 1970s, monetary policy makers did little because they were convinced that action would be ineffective. Subsequent events proved both decisions wrong....
[H]ypothetical fears shouldn’t stop the Fed’s evolution. History is on the side of doing more, not standing on the sidelines.