David Wheelock of the Federal Reserve Bank of St. Louis describes the following episode at the beginning of the Great Depression: Following the stock market crash [of October 1929], the Federal Reserve Bank of New York used open market purchases [of Treasury securities] and liberal discount window lending [to commercial banks] to inject reserves into the banking system. . . . The Federal Reserve Board reluctantly approved the New York Fed's actions ex post, but many members expressed displeasure that the New York Fed had acted independently.

a. What are the arguments for and against a Federal Reserve Bank operating independently?

b. In the modern Fed, would it be possible for a Reserve Bank to act as the New York Fed did in 1929?