As Mr. Bernanke pointed out in a speech in 2002, when he was a Fed governor, a central bank that has run out of ordinary tools to prop up the economy, like lowering short-term interest rates, still has other options to prevent deflation.

It's good to see discussion of disagreements within the Fed. But these would be more useful if they acknowledged that the Fed's board does not just have technical disagreements about how best to improve the economy; they have political differences over whether it's worth fighting unemployment if there's any risk at all of inflation. That actually existing extreme levels of unemployment are seen by a majority of the Fed as less frightening than purely hypothetical inflation relates to major role that private bankers play in the Fed's governing structure--a crucial fact that is hardly ever mentioned in discussions of Fed deliberations.

See Extra! (6/10): "Framing the Fed as Financial Philosopher Kings: 'Independent' of the Public, but Not Bankers"

The battle over Bernanke's confirmation has been a test of central bank independence, a crucial element if the Fed is to carry out unpopular but economically essential policies.

From this perspective, the Federal Reserve is an organization of financial philosopher kings who must be insulated from democracy in order to do what is best for us. There is another way to look at it, of course: that the Fed essentially represents the interests of the financial industry, and that its independence is crucial if it is to carry out unpopular but economically very profitable policies--such as maintaining the value of money, otherwise known as fighting inflation, by keeping people out of work who would otherwise be employed. You will not often find this alternative perspective discussed in corporate media.