Limitless: The Federal Reserve Takes on a New Age of Crisis

New York Times economic policy reporter Smialek’s book is the most comprehensive study to date explaining the Federal Reserve’s historical and current inner battles to handle the United States’ economic crises. During the Civil War, the author points out, currency-supply standardization was implemented to control the flow of money within the country. The Office of the Comptroller of the Currency eventually expanded and defined the rules for that standardization to enable the government to manage government programs and taxpayers’ funds. It also established the accounting principles for the national banking system, which could be updated and enforced. For example, this accounting system set up the methods through which banks could apply for federal charters, but they were required to keep government bonds on deposit as a security. When the focus was on fighting inflation from 1950 to 2000, the Federal Reserve became vastly more powerful and independent of the White House. Subsequently, during the late 1980s and 1990s, the debate over the power and oversight of the Federal Reserve lessened when unemployment was low and productivity increased.