In the Invention of Money, a Planet Money feature on This American Life last month, the reporters peel back the layers on the terrifyingly crazy fiction called money. But, in doing so, they are surprisingly quick to uncritically repeat another fiction: the idea that some government agencies somehow aren’t really part of the government. During his intro to this fascinating piece on the Federal Reserve’s response to the financial crisis, Ira Glass explains that “though the Federal Reserve’s name includes the word ‘Federal’ it is not actually part of the Federal government. It is an independent institution.”
I’m not the only one who picked up on this theme. Over at a Ron Paul fan site, a blogger took away that the show “explains what the Fed is, not related to the Federal Gov, etc.” A commenter on this post concluded “3) the Fed is not part of the government.” This is, of course, not really true.