The chairman of the Federal Reserve, Ben Bernanke, is falling short of the two goals Congress has legislated for the Fed: fighting inflation and promoting employment. Inflation is up — that is, the value of the dollar is down — as can be attested by anyone who has looked at the price of gold or bought gasoline or visited a supermarket. Unemployment is up, too, as recent jobs reports attest. So what does the chairman do? He tries to gain for himself a third responsibility, “promoting financial stability,” and with it a fourth, regulating “nonbank financial institutions” such as Goldman Sachs, Merrill Lynch, Morgan Stanley, and Lehman Brothers.

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Mr. Bernanke’s suggestion was carefully cloaked to make it sound like it was the Treasury Department or Congress that would be saddling the Fed with this additional responsibility. But neither was he putting up much resistance. And why should he? Given the disappointing performance of the Fed on the inflation and employment fronts, why not find some new job to provide the prospect that the Fed might be successful? Problem is there is little reason to believe the Fed would handle these new tasks any better that it handles its existing ones.

Mr. Bernanke himself conceded this when he acknowledged, “Financial crises have occurred periodically around the world for literally hundreds of years, and it is unrealistic to hope that they can be entirely eliminated, especially while maintaining a dynamic and innovative financial system.” But providing new powers to the Federal Reserve might prove tempting to both Congress and the Treasury, since it would provide a dodge for politicians worried about getting blamed for a bad economy.

What it means is that even more than now, the politicians would be able to point fingers at the Federal Reserve and say it is the Fed’s fault. Nor will the big four financial institutions necessarily resist the Fed’s involvement. It is a nice thing to have the power of the government as a safety net between your shareholders and the risk of bankruptcy. If Bear Stearns was, by the Fed’s assessment, too big to fail, so are its competitors.

The price of such involvement will ultimately be borne by ordinary Americans. It will show up in the cost to the competitors of the institutions the Fed props up. It will show up in the uncertainty that the Fed creates by changing the rules in the middle of a crisis. And it will show up in the takings by that silent thief, inflation, whose work, we fear, is only beginning.

What an inconsistency for President Bush. In foreign policy, he has chosen to emphasize freedom and democracy over the “stability” that he recognizes has too often been a code word for diplomatic defenders of the status quo. Why would he not display similar skepticism against those who hold out financial stability as something that the Fed can achieve or even strive for without attendant costs?

Instead, we face a Congress controlled by a Democratic Party that claims to represent the working man and an executive led by a president, George W. Bush, who boasts, “I’m not one of these guys that really gives a darn about elite opinion.” When they decide to join together to hand more power to an unelected panel of Fed governors comprising economists who serve 14-year terms, they default on constitutional responsibilities, merely delaying a reckoning that will have to come at some point.