There's a complex relationship between the condition of the nation's capital markets and its macroeconomic performance. Equally complex is the parallel relationship between monetary policy set by the Fed the via interest rates and money supply and the far broader distributive fiscal policy options at the disposal of lawmakers. The past month's heavy losses among big, institutional investors coming at a time when the GDP has been contracting over the last couple of quarters are generating a spate of thought and opinion about this relationship. The Federal Reserve Bank is charged almost exclusively with monitoring and seeking to contain inflation, consistent with maintaining capital liquidity needed for markets to operate. The Fed's appointed (not elected) governors may be concerned about unemployment, wages, and inequality, but have no constututional or statutory authority to address these directly. That can be done directly through fiscal policy -- the exclusive province of elected representatives. An editorial in today's Los Angeles Times, Stay the course, urges: "When it comes to interest rates, the Federal Reserve should worry less about Wall Street and more about Main Street." The editorial notes that "over the last two weeks [the Fed] has pumped billions of dollars into the economy and slashed the interest rate it charges banks for short-term loan [and now] the question is whether the Fed should do more." The Times argues against any further such action, saying that easy credit got us into the market contraction in the first place: "it would save investors who should suffer the consequences of their bad choices." Wall Street certainly will use any excuse to clamor for easier money. But one of the main reasons the financial markets are in a fix today is that credit was too cheap for too long, which prompted lenders to take on irrational risks. Another reason is runaway financial innovation, which threw traditional lending standards out the windows. Traditional lending standards, the choices of lenders and investors, wise or foolish, are well (and well kept) beyond the purview of the Fed. And what has any of this to do with the interests of Main Street, which the Times mentions only in the headline, or about job security, wages, and other issues of interest to many who work, shop, and meet on the corner of Wall Street and Main?