Barbara Rixstine reviews in the Lincoln Journal Star
Read it here
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
"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
Yes, Bernanke's Fed became, in essence, a fourth branch of
Yes, Bernanke's Fed put new processes and procedures in
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
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
Barbara Rixstine is not an economist, nor does she play one