This week’s release of the minutes of the September 21 meeting of the Federal Open Market Committee (FOMC) points to an activist Federal Reserve that is in policy experimentation mode – an institution that feels compelled to take additional measures to energize the American economy yet is uncertain about the potency of its interventions. This mix, of a highly engaged institution having to operate with imperfect instruments, has implications that are felt well beyond the U.S. Judging from the minutes, it is virtually a foregone conclusion now that the Fed will announce on November 3 that it is re-engaging in “unconventional policies” – a new program of quantitative easing, nicknamed QE2. By buying securities, the Fed will be looking to “push” others into taking more risk – to push investors to move out on the risk spectrum and buy corporate bonds and stocks; to push banks to use their large excess reserves to make loans; and to push large companies to deploy their record cash balances to purchase equipment and hire people. Most people do not like to be pushed into doing anything, let alone into taking more risk. They would rather be “pulled” by the underlying attractiveness of the activity. Because of this distinction, the minutes indicate that some within the FOMC feel “that the economic benefits could be small in the current circumstances.”...