From the Chicago Tribune — Originally published Monday, June 22

The financial crisis that has battered the U.S. economy … was at least partly the result of insufficient government involvement. In its plan to revamp financial regulation, the Obama administration is not making that mistake. It’s making the opposite one.

… It probably makes sense for the Federal Reserve to take over responsibility for all financial regulation, as Treasury Secretary Timothy Geithner proposed — if only because no one else is more equipped to do it and because the Fed is the guarantor of financial stability.

But let’s not expect too much of the Fed, which after all contributed to the bubble by keeping interest rates too low for too long. Giving it more authority will not make it wiser or more prescient.

Nor will it necessarily induce the Fed to act promptly against financial excesses that can be exceedingly pleasant in the short run. One Fed chairman said his job was to “take away the punch bowl just when the party gets going.” But doing that doesn’t make you many friends on Capitol Hill. …