Let's see if I got this right. Fed Chairman Ben Bernanke has bungled the credit crisis and the financial markets. He cut interest rates too aggressively early on, gave conflicting signals on his willingness to raise rates when needed, panicked when Bear Stearns collapsed, and hurried through the bailout by JPMorgan Chase (NYSE:JPM). He then gave unprecedented borrowing terms to investment banks. Now he wants the Fed to gain even more control over financial institutions?

Riiight! That should happen.

While the markets surged at the prospect of the Fed extending the investment bank lending program, it seems that some of the biggest proponents will be those who stand to gain the most, yet also bungled the worst. Lehman Brothers (NYSE:LEH) briefly teetered on the edge of insolvency itself, and used the new authority back in April; unsurprisingly, it favors the program's extension.

The Fed's monetary policies, though, have led us to our current situation. Commodities have spiked not because of shadowy speculators, but rather because the Fed has allowed the dollar to grow weak and stay weak. Bernanke said he would support a strong, stable dollar, but then allowed interest rates to hold steady. Oil, which initially fell on the news, surged again. Equities, which have been sagging all along as the economy itself stagnates, have continued to fall, despite all of the Fed's stimulus plans.

Bernanke focuses on "core inflation" -- a fiction that ignores the real word of food and fuel. He's got Congress ready to unleash a torrent of taxpayer-funded bailout programs that will only delay the day of reckoning, and assuredly make it worse. The Bank of America (NYSE:BAC) bailout of Countrywide Financial could put taxpayers on the hook for some $25 billion in mortgages. That's above and beyond the monstrous risk already being shouldered by both Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE).

Industries across the country are faltering or failing as a result of these miscues. Airlines may go under en masse as a result of exorbitant fuel prices. General Motors (NYSE:GM) and Ford (NYSE:F) stock stand at multidecade lows because their vehicles are pariahs in an era of $4-a-gallon gas. Retailers languish because American consumers' discretionary spending is being siphoned away by gas and food. There's little left for anything else.

In all of this, Bernanke says he and the other Fed governors, along with the politicians at the Treasury Department, are best equipped to stave off future such crises. As if they had any insight into the current crisis before it arose.

The purpose of the Fed is to keep the economy on an even keel. It is supposed to maintain a stable currency and keep inflation in check. Instead, the Fed at the hands of Bernanke has lurched from one crisis to the next, slapping at the flames in hopes they won't spread to the next incendiary time bomb in the economy. Giving Bernanke and friends even more control is simply letting them pour more gasoline onto an already raging fire.

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