Fed member says central bank action isn't aiding jobs

Federal Reserve Bank of Dallas president Richard Fisher said the central bank's plan to buy $400 billion of long-term bonds while selling the same amount of short-term debt is benefiting financiers and not aiding job creation.

The bond swap program, known as Operation Twist for its goal of bending the yield curve, has "so far been of greater benefit to traders and large moneyed interests than to job-creating businesses," Fisher said Friday in a speech in Dallas.

"I would submit that adding more liquidity, or making money still cheaper, is not the answer to our problems," Fisher said, renewing his criticism of Congress and the White House, which he said "have conspired over time, however unwittingly, to drive fiscal policy into the ditch."

Fisher was one of three Fed policymakers to dissent from decisions in August and September to ease policy with unconventional tools. Central bankers last month discussed additional measures aimed at lowering borrowing costs, such as large-scale asset purchases and tying the Fed's near-zero interest rates to economic indicators such as inflation.

Directing his remarks to "Republicans and Democrats alike," Fisher, himself a former Democratic candidate for the U.S. Senate in Texas, said politicians "purchased their elections and reelections with popular programs so poorly funded that they now threaten the economic well-being of our children and our children's children."

"This is the opposite of honorable, and it must stop," Fisher said in the text of remarks to the Dallas Friday Group, an organization of people in business.

Fed governor Daniel Tarullo, who has backed all of chairman Ben S. Bernanke's policy decisions for almost three years, said Thursday that the central bank should consider resuming large-scale purchases of mortgage bonds to boost economic growth and help combat a "crisis" in employment.