The Lords of Easy Money: How the Federal Reserve Broke the American Economy

Years of economic policy that flooded the financial system with money has made the economy more fragile and unfair, according to this probing history. Business reporter Leonard (Kochland) recaps the revolutionary measures the U.S. Federal Reserve Bank has instituted from the 2008 crash up through the Covid-19 collapse: a policy of keeping interest rates close to 0% to promote growth, and a program of “quantitative easing,” which has injected trillions of dollars, created out of thin air, into the economy to further stoke it. The result, he argues, is asset bubbles in everything from stocks to risky investment instruments called collateralized loan obligations, which could burst and tank the economy if the Fed closes the money spigot; meanwhile, the inflation of asset prices lets the asset-owning rich increase their wealth as the middle class falls further behind. Leonard shrewdly dissects the policy wrangles roiling the Fed behind its facade of technocratic consensus—he presents a sharp riposte to glowing accounts of former Fed chairman Ben Bernanke’s leadership—while offering a trenchant analysis of how the Fed controls and misshapes the economy. The result is a timely and persuasive challenge to the Fed’s new economic orthodoxy. (Jan.)