Back Cover Blurb for The Lords of Easy Money: How the Federal Reserve Broke the American Economy by Christopher Leonard
If you asked most people what forces led to today’s unprecedented income inequality and financial crashes, no one would say the Federal Reserve. For most of its history, the Fed has enjoyed the fawning adoration of the press. When the economy grew, it was credited to the Fed. When the economy imploded in 2008, the Fed got credit for rescuing us.
But the Fed also has a unique power to reshape the American economy for the worse, which it did, fatefully, on November 4, 2010 through a radical intervention called quantitative easing. In just a few short years, the Fed more than quadrupled the money supply with one goal: to encourage banks and other investors to extend more risky debt. Leaders at the Fed knew that they were undertaking a bold experiment that would produce few real jobs, with long-term risks that were hard to measure. But the Fed proceeded anyway…and then found itself trapped. Once it printed all that money, there was no way to withdraw it from circulation. The Fed tried several times, only to see markets start to crash, at which point the Fed turned the money spigot back on. That’s what it did when COVID hit, printing 300 years’ worth of money in two short months.
“The Federal Reserve system is unlike any other in the world; it is a crazy genetic mashup of different animals, part private bank and part government agency.”
― Christopher Leonard, The Lords of Easy Money: How the Federal Reserve Broke the American Economy
I have gotten stuck on this review for a long time because money and how the American money supply effects people all over the globe is such a big topic that is both academic and has real affects on lots of really different people. I found this book both interesting and informative and I think about currency and exchange more than I did before I read this book.
As an expat, I interact with a number of people who left their home countries for reasons that seem related to effects of the policies of my home country. Then there are some people (the Federal Reserve) who have the power to create American dollars out of literally nothing. Money has always been an abstract and invented concept. The economy seems to be a name for the sum of the tallies of what and who counts and what and who does not.
I would not call this a beach read for most people, but it stays with me in small and large moments from what and how to invest to buying falafel from a stranger. It is not a favorite in the enjoyment sense, but it has opened my eyes and expanded my horizons in a way not many other books have.