In Fed We Trust-A Review by David Wessel

August 10, 2009

History is rarely considered to be real history until the events have faded from the collective minds of the populous that lived through them. It’s usually only after the dust has settled, and it can be picked back over by historians that lots of the pertinent facts about what happened are uncovered. Regarding the current depression that people in every country in the world have been combatting, the event itself hasn’t even ended. However, even though the housing crisis hasn’t ended, and the memories of the lending collapse and credit freeze are still recent memories in the minds of bankers, author David Wessel has put forth a historical work attempting to explain the actions of the government, their motivations, and the effects their decisions had on the current recession.
“In Fed We Trust: Ben Bernanke’s War on the Great Panic” is a well written and beautifully researched work. In his book, Wessel quoted Ben Bernanke, who while he was the Federal Reserve Chairman was quoted as saying, “Whatever it takes,” in regards to what he, and the Federal Reserve were willing and prepared to do to stop the coming recession, and to help quell the fears of the American people as they contemplated the unthinkable… a recession as long lasting and deep reaching, if not more so, than the Great Depression of the early 1900’s.

“In Fed We Trust,” takes on a truly massive job. It has to tell not only the story of the Wall Street panics, and how the entrenched financial institutions like A.I.G. began to fail, but to explain the wider reaching implications of these events in the view of a national economy. Beyond that, “In Fed We Trust” also has to document the challenges that Bernanke and the rest of the federal reserve faced as to what to do to fix things before they got even worse than they already were.
Wessel dug deeper into the history, motivations, and actors who took place in this world-spanning, financial crisis. Quoted as saying that Bernanke was, “brilliant, but temperamentally cautious,” Wessel points out that Bernanke had researched and written about the events that led up to, and which contributed to, the Great Depression when he had still been an academic. It was that background, and Bernanke’s familiarity with what had happened during the Great Depression that made him, perhaps the ideal candidate to have in charge during the current financial recession, which has so often been compared to the Great Depression in the media.
Once the story of what happened on the outside (namely the financial effects in the private sector that led to government involvement) has been told, “In Fed We Trust” shifts perspectives and attempts to strip away the bland and blocky exterior of the federal reserve to illuminate its inner workings to the reader. It’s by showing the reader the inside workings of this, “opaque and undemocratic” institution that Wessel pieces together the timeline of what did and didn’t happen for the laymen. It’s a very difficult undertaking as well, attempting to explain how the most powerful, financial institution in the world rose up to become almost a 4th branch of the United States government. Perhaps as difficult as deciding whether or not that rising up was heroic or not in light of the events that were happening, and which are still heppning.
While extremely insightful, the book does have its drawbacks. Wessel explains the events that decimated the financial market very well, but that being said, there is only so much excitement that an author can put into the workings of the financial markets. Many readers, particularly those who want the history explained to them or who have a knack for understanding finances and business will have no trouble with the details, but for those coming in with no background, their interest might flag before they finish the book in its entirety.
If a reader truly finds the subject matter of “In Fed We Trust” thrilling and exciting, or if they’re just determined to read the book and find out what happened, they would be better advised to get the book in print. While available as a ten and a half hour audio book, with the text read by Dan Woren, the audio version of “In Fed We Trust” is made more difficult to follow for two major reasons. The first is that, while the sound quality is perfect and the voice of Dan Woren is smooth and relaxing, the way the monotone nature of the reading is distracting. If a listener wants to get the full story from “In Fed We Trust”, then they should sit and listen to the recording with their full attention, and not while driving, jogging, or while doing anything else distracting. The second difficulty that the audio book version has that the physical version doesn’t, is if the reader needs to check back on previous information to understand the next chapter, they can flip through the pages and scan what they’ve already read. With the audio version, if a listener doesn’t get the full text the first time through, finding all the relevant details by rewinding the audio book may end up feeling like more trouble than its worth to try and understand the complicated issues put forth in “In Fed We Trust”.
For readers who find the subject matter, or the performance, of “In Fed We Trust” to be to their liking, there are other books out there for them to find and read. If after reading “In Fed We Trust” a reader finds that they want to add another dimension to their understanding of the recession by reading about the housing crisis and its contribution, they should pick up “The Housing Boom and Bust” by Thomas Sowell. And, if the reader is brave enough, the audio version narrated by Robertson Dean.

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