Anatomy of an economic debacle: How the Fed proposed bailing out Mexico to pass NAFTA

The inside story of how the supposedly "above politics" bank lobbied -- and facilitated a currency and trade crisis

Matt Stoller

The Federal Reserve is supposedly an independent central bank, that we’re told is above politics. By this telling, it is supposed to be staffed with ramrod straight central bankers, tight-fisted but apolitical. While the Fed can state its opinions on policy matters when asked by Congress, it isn’t supposed to use its power to manipulate the political system. And it isn’t supposed to propose bailing out a foreign country just to get the United States Congress to change policy.

But in 1993, that is exactly what the Federal Reserve did.