A Federal Reserve insider pulls back the curtain on the secretive institution that controls America’s economy
After correctly predicting the housing crash of 2008 and quitting her high-ranking Wall Street job, Danielle DiMartino Booth was surprised to find herself recruited as an analyst at the Federal Reserve Bank of Dallas, one of the regional centers of our complicated and widely misunderstood Federal Reserve System. She was shocked to discover just how much tunnel vision, arrogance, liberal dogma, and abuse of power drove the core policies of the Fed.
DiMartino Booth found a cabal of unelected academics who made decisions without the slightest understanding of the real world, just a slavish devotion to their theoretical models. Over the next nine years, she and her boss, Richard Fisher, tried to speak up about the dangers of Fed policies such as quantitative easing and deeply depressed interest rates. But as she puts it, “In a world rendered unsafe by banks that were too big to fail, we came to understand that the Fed was simply too big to fight.”
Now DiMartino Booth explains what really happened to our economy after the fateful date of December 8, 2008, when the Federal Open Market Committee approved a grand and unprecedented experiment: lowering interest rates to zero and flooding America with easy money. As she feared, millions of individuals, small businesses, and major corporations made rational choices that didn’t line up with the Fed’s “wealth effect” models. The result: eight years and counting of a sluggish “recovery” that barely feels like a recovery at all.
While easy money has kept Wall Street and the wealthy afloat and thriving, Main Street isn’t doing so well. Nearly half of men eighteen to thirty-four live with their parents, the highest level since the end of the Great Depression. Incomes are barely increasing for anyone not in the top ten percent of earners. And for those approaching or already in retirement, extremely low interest rates have caused their savings to stagnate. Millions have been left vulnerable and afraid.
Perhaps worst of all, when the next financial crisis arrives, the Fed will have no tools left for managing the panic that ensues. And then what?
DiMartino Booth pulls no punches in this exposé of the officials who run the Fed and the toxic culture they created. She blends her firsthand experiences with what she’s learned from dozens of high-powered market players, reams of financial data, and Fed documents such as transcripts of FOMC meetings.
Whether you’ve been suspicious of the Fed for decades or barely know anything about it, as DiMartino Booth writes, “Every American must understand this extraordinarily powerful institution and how it affects his or her everyday life, and fight back.”
|Publisher:||Penguin Publishing Group|
|Product dimensions:||6.20(w) x 9.10(h) x 1.40(d)|
About the Author
Danielle DiMartino Booth is the founder of Money Strong, LLC, an economic consulting firm. She began her career in New York at Donaldson, Lufkin & Jenrette and Credit Suisse, where she worked fixed income and the public and private equity markets. After working as a financial columnist at the Dallas Morning News, DiMartino Booth spent nine years as an adviser to Richard Fisher at the Federal Reserve Bank of Dallas. She lives in Dallas with her family.
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Excerpted from "Fed Up"
Copyright © 2017 Danielle DiMartino Booth.
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Table of Contents
Chapter 1 "Groupstink" 1
Chapter 2 Who Would Buy That Crap? 11
Chapter 3 Saint Greenspan 19
Chapter 4 Inside the Black Box 30
Chapter 5 The First Tremors 51
Chapter 6 Front-running the Fed 59
Chapter 7 The Maverick 66
Chapter 8 The Inner Sanctum 76
Chapter 9 "Luddite!" 92
Chapter 10 Helpless 97
Chapter 11 Slapped in the Face by the Invisible Hand 117
Chapter 12 Heads Must Roll 130
Chapter 13 Breaking the Buck 140
Chapter 14 Breaching the Zero Bound 150
Chapter 15 The Walking Dead 164
Chapter 16 Dr. Ben Pulls a Bait and Switch 184
Chapter 17 A Turning Point 200
Chapter 18 Insider Trading? 206
Chapter 19 Spinning Fedwire 225
Chapter 20 The Taper Tantrum 231
Chapter 21 The New Sheriff in Town 238
Chapter 22 Culture Shock 250