Fed Up – A First-Hand Account of the Fed’s Foibles

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Danielle DiMartino Booth, a former Dallas Federal Reserve official, released a new book this week entitled Fed Up. The book, a first-person account of the inner-workings of the Federal Reserve (Fed), provides readers with unique insight into the operations, leadership and mentality of the world’s most powerful financial institution. What it reveals about the Fed is neither flattering nor confidence-inspiring. Through identifying and analyzing the Fed’s modern-day machinations, DiMartino Booth provides an assessment of how the highest levels of economic thinking are afflicting our economy.

It is clear her purpose is equal parts entertainment and education with a dash of sermon to underline the gravity of the situation. Fed Up is compelling, well written and its objectives are clear: expose the hubris at the Fed, which results in poor decision-making, and generate much-needed debate to bring about change in how it functions. As you read this review, and hopefully the book as well, remember that the Fed is sworn to serve the American public. It should be held accountable to this obligation.

Confluence of events

Skill, talent, temperament and career path often have a funny way of converging at just the right time to produce something that is needed at a particular moment to change the course of events. DiMartino Booth’s Wall Street experience and tenure as a journalist converge with her personal traits of curiosity, healthy skepticism and integrity to expose the powerful forces of the Fed and the means by which they use their influence.

DiMartino Booth spent enough time on Wall Street to become “enlightened” to the ways of high finance, and then went on to pursue a career in journalism at the Dallas Morning News. Her insight and warnings in the years preceding the Great Financial Crisis of 2008 are well-documented and stand in stark contrast to the mindset of the Fed and the then-Chairman Ben Bernanke who once claimed to have “found little evidence to support the existence of a national home price bubble.” Fortunately, the Dallas Federal Reserve Bank President, Richard Fisher, was a rare exception within the Fed and took notice of DiMartino Booth’s articles. In the fall of 2006, Fisher convinced her to join his research department.