The Special Inspector General for TARP, Christy Romero, has recommended that the Federal Reserve and the Treasury Department stop using LIBOR, the benchmark interest rate derived in such a slipshod way that it was rigged for years. But the Fed and Treasury aren’t taking Romero up on the request.

We do not yet have a very good context for the costs of the Libor rate-rigging scandal. We know that derivatives traders gained when they called in favors and had banks set the Libor in ways favorable to their bets. And we know that banks benefited from artificially setting the Libor down during the financial crisis to mask their poor fiscal health. But how did that manifest itself in the real world? The investment bank Morgan Stanley has penciled out an estimate of just the Libor suppression, the artificial rigging of the rate lower during the crisis. This does not take into account the derivative trading. And just on that alone, they come up with about $22 billion in fines.

The Fed is statutorily obligated to manage monetary policy for maximum employment consistent with stable prices. Bernanke has done nothing to meet the employment part of the Fed’s obligations. There are people who will.