My rating: 5 of 5 stars
I am sorry if my review turns into a summary of this book I just love to talk about it.
So I gave this book a second read because I was struggling to remember some of its main points and am so happy to refamiliarize myself with the material. It builds a strong argument by starting with what America was like before it centralized its bank. The Revolutionary War ended in 1783 and it wasn’t until December 1913 that the Fed Reserve Act passed under President Wilson. During that 130 year period, there were two attempts at centralizing the bank, both failed when the government failed to renew their charters. The second failure coming from President Andrew Jackson, who considered banking regulations beneficial for the American elite, which directly countered his populist movement.
After the crash of 1893 and 1907 the need to centralize banking entered the forefront of political debate. The unregulated market created competing monopolies, which could game the economy. In 1907 a failed attempt to take over the copper monopoly triggered a panic. Banks ran out of reserves when everyone tried to cash out at the same time and country had a financial collapse.
This led some of the harshest critics, like Nelson Aldrich into advocates for a centralized bank. He failed to pass his own bill, but a couple years later the Fed Reserve act (Owen-Glass Bill) borrowed heavily from Aldrich.
Not to make this review political, but I feel like this is an important read given the political climate today. Populism can have dangerous consequences and can lead to undisciplined decisions. Though it has its faults, the federal reserve is beneficial to the American economy.