John B. Taylor: “Fiscal policy is certainly a mess right now, and it has to be fixed, or we will be like Europe”

The Congress, through the Banking Committee and the Financial Services Committee, is in a good position--in fact, it is a unique position in our Government--to oversee monetary policy in a strategic sense, not in a tactical sense.

I would characterize it as they held interest rates too low for too long in that period, and that caused excesses in the housing market.

the effect of this too-big-to-fail affects us even now on a relatively calm day, because the giant banks are getting bigger.

I think the more transparent the Fed can be with respect to its strategy or its operations, the less chance there is for such leaking.