Reviews

Boston Globe: "masterfully weaves economics, politics, history..."

Robert Gavin's review in the Boston Globe: Wessel masterfully weaves together economics, politics, history, and high finance, infusing the story with personalities and anecdotes, such as Bernanke’s call to his wife. He takes the reader deep into the Federal Reserve, explaining how this mysterious agency operates and illuminating the fierce debates and personal clashes that lurk behind the Fed’s bland, often opaque statements on interest rates.

 Read it here

"Language a noneconomist can understand"

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 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.

Minn Fed's Fettig: Should Have Titled It: "Whatever It Takes"

"Wessel could have titled his book Whatever It Takes, as it is a central theme and phrase employed throughout the book to describe the motivation of Bernanke, Paulson and Geithner, among others, as they labored under tight deadlines and mounting stress to prevent what they believed was a pending depression to rival the great one of the 1930s. Time will tell whether they were right. Or maybe it won’t. After all, economists and historians are still arguing about the causes and consequences of the Great Depression. They simply will never have the counterfactual and so will likely go on telling stories about the Great Panic for many years. In Fed We Trust is a solid first crack at that story, especially with its focus through a Federal Reserve lens. But as Wessel well knows, this story is far from finished; the next installment will likely be recounted in his paperback edition."
-- David Fettig of Minneapolis Fed in "Region"   Read it here.

The Economist: "A cracking story."

"The story of their financial firefighting is a thrilling one, deftly told by a veteran journalist with access to those involved. Mr Wessel has an eye for enlivening detail (a deal between the Feds and Subway restaurant, for instance, ensured a ready supply of sandwiches); and he has a knack for making finance accessible to the layman without boring the specialist...a cracking story, the best chronicle so far of what officials were doing in the great financial bust of 2007-08."  -- The Economist, Sept. 10, 2009. Read the review here

Steven Weisman: 'A keen sense of the characters'

"Journalism may be the first rough draft of history, but historians will long value what Wessel brings to this book: his understanding of the sweeping changes in finance and the rise of the “shadow banking system” over several decades is coupled with a keen sense of the characters and the sequence of policy choices they confronted."  Steven Weisman, Peterson Institute for International Economics.Read it here


Clive Crook in National Journal: 'Absorbing, Balanced Appraisal'

"For an absorbing and balanced appraisal of Bernanke's performance so far, read In Fed We Trust: Ben Bernanke's War on the Great Panic by David Wessel, The Wall Street Journal's economics editor. In my view, this is the best of the many books on the economic crisis to have appeared so far. It gives a closely reported account of how Treasury and the Fed responded to the emergency as it unfolded, vividly describes the main actors and their roles, and provides along the way an accessible guide to the underlying economic and financial issues."   Clive Crook in National Journal Read it here.

Financial Times Review: Too Soon to Judge Bernanke

Ed Luce review in 8/29 Financial Times   

Might Wessel be too enamoured of his intrepid musketeers? Could tomorrow’s consequences be worse than anticipated? There are two reasons to be wary of Wessel’s conclusions. First, none of the musketeers saw the crisis coming. All of them, particularly Bernanke, were strongly supportive of Greenspan’s now controversial decision to keep US interest rates “too low for too long” following 9/11 (thus stoking the housing bubble). Likewise, of the Fed governors, only the late Ned Gramlich attempted to persuade Greenspan to exercise the Fed’s existing powers of regulation over the subprime mortgage industry. To no avail.

Second, the financial crisis is by no means over. In the space of a few months, the Fed’s balance sheet has more than tripled to almost $2,500bn – an extraordinary expansion that has almost certainly staved off deflation but at the risk of a return to what others, including the Chinese, fear may be a Great Inflation.

Finally, the political chickens have yet to come home to roost. As Wessel observes: “The more the Fed got involved in these politically charged bail-outs, the more it risked its prized independence in setting interest rates ... without fear of political interference.”

The Fed’s independence is under challenge on Capitol Hill. No one can discount the risk of a return to inflation. Until Bernanke has settled these two accounts, the jury should delay its verdict.

Edward Luce is the FT’s Washington bureau chief

Thoughtful Critique by Jamie Galbraith

Writing in Washington Monthly  Galbraith -- correctly -- says the ultimate verdict on Bernanke must wait for the passage of time. Read it here.

Washington Post Review: "Effectively Narrated"

Charles Lane, an editorial writer for the Washington Post: "A second term for Bernanke would be a good call for Obama if he wants to preserve continuity at the Fed, and if he concludes that Bernanke's belated but creditable actions merit a reward. But in a sense, the Fed's job for the next half-decade has already been determined by the course Bernanke chose in the past 18 months. Whoever takes the helm will face the greatest liquidity mop-up in history. And only if the Fed pulls it off can there be a happy ending to the Great Panic, whose scary beginning David Wessel has so effectively narrated.'  Read it here

Donald Luskin on Smartmoney.com: "Must read thriller of the summer."

Donald Luskin, on smartmoney.com: " Suddenly the shelves of the nation's bookstores are filled with hastily-printed volumes purporting to tell the inside story of the credit crisis. If you want to read salacious and superficial stories of how a couple of big investment banks blew themselves up with greed, stupidity and the lifestyles of rich and famous executives, you have quite a few choices. But if you want to really understand what happened, there's only one book -- "In Fed We Trust" by David Wessel. Read the review.