Fed Chair Janet Yellen is worried about inequality. As she said in a speech last week:

The extent of and continuing increase in inequality in the United States greatly concern me. I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity.

Now some Fed critics found Yellen’s concerns ironic or even hypocritical. After all, haven’t the Fed’s actions made inequality worse? Hasn’t quantitative easing pumped up the stock market to the benefit of wealthier Americans who have more of their assets in stocks than do the 99%? To this criticism, Boston Fed boss Eric Rosengren offers a spot-on response in a chat with the WaPo’s Matt O’Brien:

There’s no disputing the fact that asset prices have gone up as a result of what we’re doing,” Rosengren acknowledged, and that “disproportionately helps somebody who has enough wealth that they have, for example, stocks.” But “on balance” he “thinks the net benefits outweigh the net costs in terms of income inequality” for a simple reason: “the one thing that really contributes to income inequality is to have no income at all.”

Or, as he put it, “being unemployed is the ultimate inequality. It not only destroys your income, but probably destroys your wealth, and frequently has big impacts on your entire family.” And that means, “to the extent that QE and the other tools that we’re using bring the unemployment rate down, that disproportionately helps people at the lower end of the [income] distribution.” Furthermore, “if you think about who’s the lender and the creditor, the creditor who’s lending the funds tends to be at the upper end of the distribution.” So “low interest rates are good for the people at the bottom of the distribution” who need to borrow to go school or buy a car or a house.

Really, you have to consider the counterfactual, as Rosengren does. The US economy likely would look a whole lot more like the depressed eurozone right now if the Fed had mimicked the ECB and followed similar tight money policies. If the price for avoiding a multiyear depression is higher inequality, then so be it. Don’t forget that inequality dropped sharply during the Great Recession, though America was hardly better for it.

Now of course, the Fed could have theoretically followed a more egalitarian path by foregoing a bond-buying program that supports asset prices and instead doing a “helicopter drop.” Economist David Beckworth describes how that ideally might work:

First, the Fed adopts a NGDP level target. Doing so would better anchor nominal spending and income expectations and therefore minimize the chance of ever entering a liquidity-trap. In other words, if the public believes the Fed will do whatever it takes to maintain a stable growth path for NGDP, then they would have no need to panic and hoard liquid assets in the first place when an adverse economic shock hits.

Second, the Fed and Treasury sign an agreement that should a liquidity trap emerge anyhow and knock NGDP off its targeted path, they would then quickly work together to implement a helicopter drop. The Fed would provide the funding and the Treasury Department would provide the logistical support to deliver the funds to households. Once NGDP returned to its targeted path the helicopter drop would end and the Fed would implement policy using normal open market operations. If the public understood this plan, it would further stabilize NGDP expectations and make it unlikely a helicopter drop would ever be needed.

Certainly a more populist approach to monetary policy. Yet I doubt many Fed critics, at least those on the right, would like this alternate option any better than QE. But unless you wanted a repeat of the 1930s, doing nothing and letting the financial crisis “burn itself out” hardly seems realistic.

Follow James Pethokoukis on Twitter at @JimPethokoukis, and AEIdeas at @AEIdeas.