hedge funds founder raj rajada wrrks at was sentenced to ten years for insider trading. a professor at the university of chicago's booth school of business has a singular insight into how the fed works, what it does and what it can do. he joins me right now. welcome to the program. >> good to be here. >> federal reserve chairman ben bernanke recently called the unemployment rate a national crisis. has the fed run out of things to do? >> i think it's very important to make a distinction between what the fed can and cannot do. people talk about whether it's run out of ammunition or not. it's always had ammunition to affect inflation rate, affect deflation and affect interest rates. that's what they've done to try to lower the short rate and also lower the long rate. but what impact does that have on the economy? well, that's a separate set of issues. the fed can provide the foundations for growth, it can make sure there is good function of the financial markets, it can assure that there is enough credit available, but if there's a lot of fiscal uncertainty and regulatory u