David Leonhardt has a terrifice piece in today's New York Times on the Fed's quest for more power.   His key point:

The fact that Mr. Bernanke and other regulators still have not explained why they failed to recognize the last bubble is the weakest link in the Fed’s push for more power. It raises the question: Why should Congress, or anyone else, have faith that future Fed officials will recognize the next bubble?

A related point is that, even without additional power, the Fed could have sounded an alarm about the housing bubble rather than chanting, "All is well."  Imagine how different the last few years might have been if in 2004 the Fed's testimony before Congress had been,

"Housing prices are growing at an unprecedented rate.  While the U.S. has never had a large nationwide decline in housing prices, it has also have had such a huge nationwide increase in prices, so all bets are off. Consumers and banks are becoming obscenely levered.  Fannie and Freddie are issuing mortgages to every borrower with a pulse.  This situation is scaring our pants off!