In my first year ecconomics course in University my professor did an entire lecture on why you shouldn't use monetary policy to 'fix' ecconomic problems; one of the examples he used was the stagflation that occured in the 1970's. (Stagflation is stagnation in the presence of inflation, which was considered impossible using keynesian ecconomics which was popular at the time).
Alan Greenspan and Ben Bernanke have been given the (moronic) dual mandate to preserve the value of the dollar and to 'fix' ecconomic problems using monetary policy. The end result is an ecconomy which has had growing asset bubbles which eventually burst, the fed injects a stupid ammount of money to prevent (or minimize) a recession which creates a new larger bubble and the cycle continues. The fed is reaping what it has sewn, the recessions it has avoided (or minimized) are finally here and any further monetary tinkering will be shown in inflation ...
