William Greider, who wrote the definitive book on the Federal Reserve, Secrets of the Temple: How the Federal Reserve Runs the Country, has a new article in The Nation magazine, Dismantling the Temple .

It's quite long, goes over some of the history of the Federal Reserve but I want to point out Greider's 6 reasons why the Federal Reserve should not be made systemic risk regulator.

1. It would reward failure.
2. Fed policy was a central force in destabilizing the US economy.
3. The Fed cannot possibly examine "systemic risk" objectively because it helped to create the very structural flaws that led to breakdown.
4. The Fed can't be trusted to defend the public in its private deal-making with bank executives.
5.  Instead of disowning the notorious policy of "too big to fail," the Fed will be bound to embrace the doctrine more explicitly as "systemic risk" regulator.
6. This road leads to the corporate state--a fusion of private and public power, a privileged club that dominates everything else from the top down.

The last point that giving the Federal Reserve even more power leads to the corporate state is a little belated. The United States already is a corporate state, the Obama administration's proposal just makes it more official.