Obstructions in the monetary-policy channels worsened a recession that has proven to be longer and, by many measures, more painful than any post-World War II slump. With its conventional policy tools blocked, the Fed has resorted to unprecedented measures over the past two years, opening new channels to bypass the blocked ones and restore the economy's credit flows.

That is a damned lie.

The Fed hasn't managed to establish "routes around" the blockage at all - they have instead supplanted normal credit flows, and in fact have done so through opacity and intentional hiding of losses. 

What's the mark-to-market loss on the Fannie and Freddie paper (which I argue The Fed doesn't even have a legal right to purchase, by the way) in their portfolio?  Maiden Lane I-III?  Who knows!  Taking down nearly 50% of net issuance of Treasuries?  Wow, that's a real effective "bypass", right?

Uh, no.  Anyone can drive the price of something up by bidding for more of it.  But Treasuries were never the problem and credit card interest rates, along with virtually all over real spreads in the real economy, remain outrageously high.

Fisher claims this is a "bad thing" but in fact it is not, for The Fed has in fact ran a Ponzi Economy for the last 30 years, as I have repeatedly documented.  Now, having come to the end of the rope they wove themselves they're upset that the Ponzi Game has run out:

Under a policy quietly formalized in 1998, the Fed refused to police lenders' compliance with federal laws protecting borrowers, despite repeated urging by consumer advocates across the country and even by other government agencies.

See how all that trash got there?  How the "TBTF" banks wound up with it on their balance sheets? 

It was not an accident - it was an intentional, willful policy of The Federal Reserve, of which Fisher is a part!

Without junk borrowers you don't have trash masquerading as real loans!  This was no "accident" of history or some sort of "hoodwink" game being pulled on The Fed - quite to the contrary.

The Fed was not only complicit in the scam it was a chief architect - one without