Following the 2008 financial crisis, the Federal Reserve restored its historic financial stability mandate with new monetary tools to help mitigate the credit crunch and stimulate the economy. This article develops a new theory about how political constraints facing monetary institutions limit the effectiveness of these tools. It develops the concept of the Fed’s financial stability paradox, suggesting that the central bank’s implicit financial stability goals can complicate its ability to meet its dual mandate of full employment and price stability. In a highly financialized world, the Fed often provides easy credit with exceptional monetary instruments, such as quantitative easing, to contain financial instability. Without sufficient regulatory tools, however, these monetary actions risk stoking moral hazard and fueling financial fragility. To test these theoretical priors, this article conducts a plausibility probe of the 2023 regional banking crises, finding that political constraints reduced the feasibility of more traditional banking supervisory powers, placing the financial stability onus disproportionately on the Fed’s quantitative easing.

We draw on a dataset of 1,044 state and national party platforms from 1980 to 2025 to track the evolution of Democratic and Republican positions with respect to higher education. The sector enjoyed considerable bipartisan support in the 1980s and early 1990s, with both parties generally expressing the view that 4-year colleges and universities contribute to economic vitality and student advancement. Starting in the mid-1990s, Republicans’ position gradually became more critical—even so, there is considerable diversity in views across states as late as 2010. In recent years, the party’s platforms have become almost uniformly negative toward higher education. The first line of GOP criticism focused on concerns about speech and alleged liberal bias. In the past decade, the party increasingly focused its criticism on higher education’s approach to racial and gender/sexuality issues—just as the intensity of opposition ramped up. Democratic platforms show much more stability but have expressed increased concern about college costs since the 2010s. Democrats also became more likely to express a liberal position on race and gender/sexuality policies just as the GOP became more vocal in criticizing these policies from the right. Our evidence suggests that the shift in the GOP’s positioning began at the national level and was instigated by nationally oriented ideological activists rather than mass-level demands. In a highly polarized and nationalized two-party system, the case of higher education illuminates the dangers that exist for any civil society institution when one party becomes hostile to its purposes and orientation.