"Language a noneconomist can understand"
Barbara Rixstine reviews in the Lincoln Journal Star
n Fed We Trust: Ben Bernanke's War on the Great Panic" by David Wessel, Crown Business, 275 pages, $26.99).
Remember the character Deep Throat in "All the President's Men"? He said three great words: "Follow the money."
David Wessel's "In Fed We Trust" follows the money from the Federal Reserve to Bear Stearns, AIG, Washington Mutual and beyond, all the while explaining bank deregulation, financial products, subprime mortgages, how the Federal Reserve works, its relationship to the U.S. Treasury and other economic wonders.
And, believe it or not, it's in language a noneconomist can understand.
"In Fed We Trust" starts in 2007, the time of The Great Panic, as Wessel calls it. Bear Stearns is about to collapse. A "shadow economy" of financial packages that are "off the books" is doing its slow but lethal work on bank and financial conglomeration spreadsheets all over the country.
But Wessel believes Americans had one major piece of luck: Ben Bernanke had just been named chairman of the Fed. (He's since been approved for a second term.)
Bernanke's claim to fame, and his ace in the hole for what lay ahead, was his academic raison d'etre -- the Great Depression. He vowed to do "whatever it takes" to keep us out of another Depression, and every day for months and months, the Great Panic was Job No. 1.
Yes, Bernanke's Fed bailed out a bunch of major corporations.
Yes, Bernanke's Fed became, in essence, a fourth branch of government.
Yes, Bernanke's Fed put new processes and procedures in motion.
But Wessel asks readers to consider this -- what would have happened if Bernanke hadn't been at the economic wheel when America's economic boat ran aground? Would we now be paying even more megabucks out of an economy that's completely tanked? It's possible.
Wessel, the economics reporter for The Wall Street Journal, knows how to write for an audience of noneconomic majors. It's not "The DaVinci Code," to be sure, but it moves and it educates and it enlightens. The glossary in the back was a big help in keeping track of the economic terms, and the Dramatis Personae in the front listed the major players.
You might be surprised by what you do and don't know about events leading up to the Great Panic, but "In Fed We Trust" will help you know what we as a country may need to do to avoid another one. And if you're an economics student - consider it required reading.
Barbara Rixstine is not an economist, nor does she play one on television.