The sub-prime lending crisis and the Fed, once again

This time it is Selgin and Beckworth.  They state the obvious, the fed is bzonkers.

I got into exactly what the Federal Reserve was doing in 2002 . In summary, the federal reserve target was on track with the market.  There was no real skew in the deviations from target, nothing extraordinary in borrowing from the discount window.

2003 to 2004 was another story altogether, the Fed began buying government bonds, even as the implicit price deflator was rising.  Why? Because the Fed needs to keep DC funded, it is as simple as that.  The Fed was looking at increasing deficits in 2002, and concluded government, its boss, might be in trouble.

So no regime change in the central banker will work as long as government gets a special place. Economic models against that backdrop is like modelling all the hairs on an elephant to determine its size, you are just bouncing the rubble.