The sore losers at the fed will soon find that they are shoting everyone in the foot, even the banks.
According to the classical economists, like Ludwig von Mises and Friedrich A. von Hayek of the Austrian school, recessions should not be resisted but embraced. Not that recessions are any fun, but they are necessary to correct conditions caused by the real problem, which is the artificial boom that precede them. Such booms, created by greed, others by inflation, send false signals to the capital markets that there are additional savings in the economy to support higher levels of investment. Ultimately, when the mistakes are revealed, the malinvestments, as Mises called them, are liquidated, creating the bust. Legitimate economic expansions, financed by actual savings, do not need busts. It is only the greed and inflation-induced varieties that sow the seeds of their own destruction.
This flies into the face of modern economic thinking that regards the business cycle as the inevitable result of some flaw in the capitalist system and sees the government's role as mitigating or preventing recessions. Nothing could be further from the truth. Boom/Bust cycles are not inevitable and would not occur were it not for the inflationary monetary policies that always precede recessions.
The Modern Federal Reserve: An Engine Of Inflation And A Creator Of Booms And Busts
The Federal Reserve turned the concept of the elastic money supply on its head by expanding the money supply indefinately. When the economy expands, the Fed expands the money supply, and then when the economy contracts, it expands the money supply even faster, in an effort to stimulate spending to offset those contractions. It's like a heroin addict trying to kick the habit who shoots up each time any withdrawal symptoms set in. It is a painless way to go, but one unlikely to produce a healthy outcome.
So the Federal reserve ultimately became nothing more than an engine of perpetual inflation, the precise opposite of what it was originally intended to be. Today the money supply is anything but elastic, as it always expands and never contracts. Had such a harebrained scheme been proposed at its inception when the Fed was created in 1913, the concept of the Fed never would have seen the light of day and its proponents would have been laughed out of Washignton.