Fed screws up, Fed gets more power

I'll leave it to others at the DR's main page and The 5 to comment later today on the specifics of the "biggest overhaul of financial regulation since the Great Depression," as the news wires are putting it.  I'll just note the truly ironic paragraph on the Wall Street Journal's home page linking to this story:

The Federal Reserve emerges at first glance as the big winner in
Paulson's proposed overhaul of financial regulation, but it would also
be given the difficult task of identifying and avoiding a crisis in

Yup, this is exactly how government works: An agency royally screws things up, and the solution is to give that agency more power.  (Spare me the comments about how the Fed isn't a government agency, please.)  But it's actually worse, because the Fed will now be expected to, in effect, somehow anticipate the consequences of its own folly.

Not the sort of news that's encouraging on a day when we see the Roubini Ratio narrowing a bit as an author pens an entire book matching Roubini's $1 trillion writedown forecast.