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

The Federal Reserve is the U.S. central banking system and is often referred to as “the lender of last resort,” because it supplies money to banks. Through its monetary policies, the Federal Reserve directly controls interest rates. Business reporter Leonard’s (The Meat Racket; Kochland) book offers insights from 1913 to the current day about the secret tricks and tactics that the Federal Reserve had at its disposal. For many years, the Federal Reserve maintained a policy of quantitative easing or maintaining an interest rate near zero, Leonard writes. During their time at the Federal Reserve, both Thomas Hoenig and Jerome Powell tried to discourage zero-interest-rate policies because these decisions had negative ramifications, Leonard argues, such as weakening the economy, and increasing income inequalities, asset bubbles, and risky investments. Moreover, once new money was introduced into the economy, there was no direct method to recall it. In Leonard’s account, the Federal Reserve is viewed as a flawed mechanism for economic development.