Trillion Dollar Triage: How Jay Powell and the Fed Battled a President and a Pandemic---and Prevented Economic Disaster

by Nick Timiraos

Overview

The inside story, told with “insight, perspective, and stellar reporting,” of how an unassuming civil servant created trillions of dollars from thin air, combatted a public health crisis, and saved the American economy from a second Great Depression (Alan S. Blinder, former Vice Chair of the Federal Reserve).

By February 2020, the U.S. economic expansion had become the longest on record. Unemployment was plumbing half-century lows. Stock markets soared to new highs. One month later, the public health battle against a deadly virus had pushed the economy into the equivalent of a medically induced coma. America’s workplaces—offices, shops, malls, and factories—shuttered. Many of the nation’s largest employers and tens of thousands of small businesses faced ruin. Over 22 million American jobs were lost. The extreme uncertainty led to some of the largest daily drops ever in the stock market.

Nick Timiraos, the Wall Street Journal’s chief economics correspondent, draws on extensive interviews to detail the tense meetings, late night phone calls, and crucial video conferences behind the largest, swiftest U.S. economic policy response since World War II. Trillion Dollar Triage goes inside the Federal Reserve, one of the country’s most important and least understood institutions, to chronicle how its plainspoken chairman, Jay Powell, unleashed an unprecedented monetary barrage to keep the economy on life support. With the bleeding stemmed, the Fed faced a new challenge: How to nurture a recovery without unleashing an inflation-fueling, bubble-blowing money bomb?

Trillion Dollar Triage is the definitive, gripping history of a creative and unprecedented battle to shield the American economy from the twin threats of a public health disaster and economic crisis. Economic theory and policy will never be the same.

Product Details

ISBN-13:	9780316272810
Publisher:	Little, Brown and Company
Publication date:	03/01/2022
Pages:	352
Sales rank:	395,188
Product dimensions:	9.30(w) x 5.80(h) x 1.20(d)

About the Author

Nick Timiraos is the chief economics correspondent for The Wall Street Journal, where he covers the Federal Reserve and U.S. economic policy. He joined the Journal in 2006 and previously wrote about the U.S. housing bust and the 2008 election. He is a graduate of Georgetown University and lives with his family in Washington, D.C.

Table of Contents

Introduction 3

Chapter 1 Hawks, Doves, and Jaybird 10

Chapter 2 "This Federal Reserve Place" 23

Chapter 3 "We Would Treat Him Pretty Ugly" 43

Chapter 4 The King of Debt 58

Chapter 5 Hot Seat 78

Chapter 6 "Boneheads" 89

Chapter 7 Into the Emergency Room 103

Chapter 8 Meltdown 119

Chapter 9 Turning the Knobs to 11 132

Chapter 10 Bagehot on Steroids 152

Chapter 11 Money Almost Stops 176

Chapter 12 "Get in the Boats and Go" 192

Chapter 13 Fate and History 218

Chapter 14 Uncle Sam's Club 233

Chapter 15 Twist of "FAIT" 249

Chapter 16 Peril and Possibility 262

Chapter 17 The Inflation Surprise 275

Epilogue: Triage and Its Aftereffects 289

Acknowledgments 303

Note on Sources 305

Selected Bibliography 307

Notes 309

Index 327

Editorial Reviews

01/31/2022

Federal Reserve chairman Jerome “Jay” Powell struggled to rescue the economy while fending off Donald Trump’s harassment, according to this intricate study of the Covid-19 economic meltdown. Wall Street Journal correspondent Timiraos recounts Powell’s tumultuous tenure from his appointment in February 2018 up to June 2021, focusing on how Trump tried to bully him into lowering interest rates. (Sample Trump tweet: “Who is our bigger enemy, Jay Powell or Chairman Xi?”) When lockdowns tanked the economy in March 2020, the Fed turned to “shock-and-awe” measures, cutting interest rates nearly to zero while buying colossal quantities of bonds and lending oceans of money to banks and businesses; his efforts stabilized the financial sector—and, according to some critics, led to rising inflation in 2021. Timiraos weaves a lucid behind-the-scenes narrative of the early Covid panic, when Powell and the Fed staff struggled hour by hour to get money out to a collapsing economy and worked with Treasury Secretary Steve Mnuchin and a fractious Congress to cobble together emergency fiscal measures, while cogently exploring the economic trade-offs among unemployment, inflation, stability, and moral hazard. This is a riveting story of policy making in crisis and an illuminating examination of how drastically the Fed’s role in the economy has changed. Agent: Rafe Sagalyn, ICM Partners. (Mar.)

Publishers Weekly

This is the book we need. The Federal Reserve’s actions since the pandemic hit have been numerous, varied, huge—and poorly understood. Nick Timiraos straightens it all out with insight, perspective, and stellar reporting. Thank you, Nick.”—Alan S. Blinder, Professor of Economics at Princeton University and former Vice Chair of the Federal Reserve

“Nick Timiraos takes readers behind the curtain to see how the creativity and courage of leaders—in this case Jay Powell and his ‘troika plus one’—could save a terrified nation from falling into an economic abyss.  In the midst of a health crisis and political and economic turmoil, we were lucky to have that leadership, as we are now to have this gripping narrative.”—Jacob J. Lew, former U.S. Treasury Secretary

“As the Fed, again, rushes to rescue the economy, Nick Timiraos goes backstage to reveal what Jay Powell and his colleagues were doing, thinking, and worrying about and why. It’s all here: the history, the economics, the politics, the tensions between key actors, the revealing interviews, the previously unreported details – all meticulously reported and deftly told.”—David Wessel, Author of In Fed We Trust: Ben Bernanke’s War on the Great Panic and Director of Hutchins Center on Fiscal & Monetary Policy, Brookings Institution

“The economy collapsed from the pandemic but the Great Financial Crisis of 2020 never happened. Nick Timiraos helps us understand why with a front row seat on the decisions made by Jerome Powell and the Federal Reserve.  But whether it’s the Fed’s unprecedented moves, President Trump’s public attacks of the Chair, or Congress pulling the Fed directly into fiscal policy, the book raises the haunting, crucial question of whether things will ever be the same again.”—Austan D. Goolsbee, former Chairman of the Council of Economic Advisers and Robert P. Gwinn Professor of Economics at University of Chicago Booth School of Business

"detailed, original reporting...fast-paced...[Trillion Dollar Triage] makes clear how much of a collective process this dizzying month of policymaking was...the pages about the current battle against inflation read like a rough draft of a history that is still being written. Powell’s legacy and the credibility of the Fed will be influenced by how this story turns out. For answers, we may have to wait for Timiraos to write a sequel."

—Jason Furman, The Washington Post

“This is a riveting story of policy making in crisis and an illuminating examination of how drastically the Fed’s role in the economy has changed.”—Publishers Weekly

From the Publisher

10/01/2021

With We Should All Be Feminists, award-winning, multi-million-copy best-selling MacArthur author Adichie offers an illustrated journal that guides readers on their own feminist journeys. Arce, who worked hard to suppress her accent after immigrating to the United States from Mexico only to be told You Sound Like a White Girl, now rejects assimilation as an illusory and ultimately racist goal meant to keep her from belonging and instead argues for honoring one's culture; currently, she's collaborating with America Ferrera to develop Ferrera's My (Underground) American Dream for television (75,000-copy first printing). Following up 1999's No. 1 New York Times best-selling The Freedom Writers Diary, which inspired a film starring Hilary Swank and an Emmy award-winning documentary, Dear Freedom Writer is a compilation by contemporary Freedom Writers and teacher Gruwell of 50 more stories representing a new generation of high school students. As musician/activist Henry looks back on All the White Friends I Couldn't Keep—they thought he wasn't sufficiently polite when discussing racism or doubted it even existed—he argues that social justice will be achieved not through civil conversation or diversity hires but more direct ways of disrupting racial inequality and violence. With The Antiracist Deck, No. 1 New York Times best-selling antiracism champion Kendi presents not a book but a pack of 100 cards, each with a conversation starter—When did you first become aware of racism? When did you first become aware of your race? What does "resistance" mean to you? —meant to get people talking. In On the Line, Pitkin recalls working as a newly hired organizer for UNITE, an international garment workers union, to unionize Arizona's industrial laundry factories with the help of a second-shift immigrant factory worker pseudonymously named Alma Gomez-Garcia. A political reporter for the Daily Beast who has spent the last several years tracking QAnon, Sommer explains what it is, why it has gained traction, what dangers it poses, and how to shake adherents loose from its dogma in Trust the Plan (100,000-copy first printing). Chief economics correspondent for the Wall Street Journal, Timiraos argues in Trillion Dollar Triage that the pandemic did not result in economic collapse owing to the efforts of Jerome H. Powell, chair of the Board of Governors of the Federal Reserve System (60,000-copy first printing). New York Times reporter Williamson's Sandy Hook reveals the ongoing tragedy of the killing of 26 people—including 20 children—at Sandy Hook Elementary School on December 14, 2012, with the parents of young victims harassed online, stalked, and even shot at and the very truth of the massacre denied by a group of conspiracy theorists whom she sees as profit motivated.

Library Journal