The Lords of Easy Money: How the Federal Reserve Broke the American Economy
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- Author：Christopher Leonard
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Summary
The New York Times
bestselling business journalist Christopher Leonard infiltrates one of America’s most mysterious institutions—the Federal Reserve—to show how its policies over the past ten years have accelerated income inequality and put our country’s economic stability at risk。
If you asked most people what forces led to today’s unprecedented income inequality and financial crashes， no one would say the Federal Reserve。 For most of its history， the Fed has enjoyed the fawning adoration of the press。 When the economy grew， it was credited to the Fed。 When the economy imploded in 2008， the Fed got credit for rescuing us。
But the Fed also has a unique power to reshape the American economy for the worse， which it did， fatefully， on November 4， 2010 through a radical intervention called quantitative easing。 In just a few short years， the Fed more than quadrupled the money supply with one goal: to encourage banks and other investors to extend more risky debt。 Leaders at the Fed knew that they were undertaking a bold experiment that would produce few real jobs， with long-term risks that were hard to measure。 But the Fed proceeded anyway。。。and then found itself trapped。 Once it printed all that money， there was no way to withdraw it from circulation。 The Fed tried several times， only to see market start to crash， at which point the Fed turned the money spigot back on。 That’s what it did when COVID hit， printing 300 years’ worth of money in two short months。
Which brings us to now: Ten years on， the gap between the rich and poor has grown dramatically， stock prices are trading far above what’s justified by actual corporate profits， corporate debt in America is at an all-time high， and this debt is being traded by big banks on Wall Street， leaving them vulnerable—just as they were during the mortgage boom。 Middle-class wages have barely budged in a decade， and consumers are buried under credit card debt， car loan debt， and student debt。
The Lords of Easy Money tells the shocking， riveting tale of how quantitative easing is imperiling the American economy through the story of the one man who tried to warn us。 This will be the first inside story of how we really got here—and why we face a frightening future。
If you asked most people what forces led to today’s unprecedented income inequality and financial crashes， no one would say the Federal Reserve。 For most of its history， the Fed has enjoyed the fawning adoration of the press。 When the economy grew， it was credited to the Fed。 When the economy imploded in 2008， the Fed got credit for rescuing us。
But the Fed also has a unique power to reshape the American economy for the worse， which it did， fatefully， on November 4， 2010 through a radical intervention called quantitative easing。 In just a few short years， the Fed more than quadrupled the money supply with one goal: to encourage banks and other investors to extend more risky debt。 Leaders at the Fed knew that they were undertaking a bold experiment that would produce few real jobs， with long-term risks that were hard to measure。 But the Fed proceeded anyway。。。and then found itself trapped。 Once it printed all that money， there was no way to withdraw it from circulation。 The Fed tried several times， only to see market start to crash， at which point the Fed turned the money spigot back on。 That’s what it did when COVID hit， printing 300 years’ worth of money in two short months。
Which brings us to now: Ten years on， the gap between the rich and poor has grown dramatically， stock prices are trading far above what’s justified by actual corporate profits， corporate debt in America is at an all-time high， and this debt is being traded by big banks on Wall Street， leaving them vulnerable—just as they were during the mortgage boom。 Middle-class wages have barely budged in a decade， and consumers are buried under credit card debt， car loan debt， and student debt。
The Lords of Easy Money tells the shocking， riveting tale of how quantitative easing is imperiling the American economy through the story of the one man who tried to warn us。 This will be the first inside story of how we really got here—and why we face a frightening future。
Reviews
Jeffrey Birge
，
An insightful， relatively easy read on a topic overlooked by most Americans。 Many are quick to point out that Leonard quickly and too eagerly reduces a complex subject， monetary policy， which may give the reader a false sense of understanding regarding the issues entrenched in the modern American economy。 I respectfully disagree。 Leonard's main argument is that we have been willingly fed the narrative that no one， save the altruistic Fed bureaucrat， could ever gain any sort of comprehension of e An insightful， relatively easy read on a topic overlooked by most Americans。 Many are quick to point out that Leonard quickly and too eagerly reduces a complex subject， monetary policy， which may give the reader a false sense of understanding regarding the issues entrenched in the modern American economy。 I respectfully disagree。 Leonard's main argument is that we have been willingly fed the narrative that no one， save the altruistic Fed bureaucrat， could ever gain any sort of comprehension of even one facet of monetary policy。 Thus， we are to "stay in our lane" and accept that the wise sages at the Fed will save the day。But the fact is that many of the issues Leonard highlights are not difficult to dissect。 The game is simple; it just involves many players。 。。。more
Michelle
，
Christopher Leonard has written a startlingly clear and informative book about the Federal Reserve。 I am definitely not a n economics expert but I have read many of the primary texts in the field。 Also， I have watched the stock market （not the bond market） for many decades。 And I am very practical and intelligent。I recommend this book。 It provides an excellent introduction to the Fed。 I think it is also a very good introduction for explaining what has been going on in the financial sector for th Christopher Leonard has written a startlingly clear and informative book about the Federal Reserve。 I am definitely not a n economics expert but I have read many of the primary texts in the field。 Also， I have watched the stock market （not the bond market） for many decades。 And I am very practical and intelligent。I recommend this book。 It provides an excellent introduction to the Fed。 I think it is also a very good introduction for explaining what has been going on in the financial sector for the past decades and now。 It may remain a good introduction to the "now" whenever you pick it up depending on your expertise。 。。。more
Jonathan
，
Wow。 Shows a deep and disheartening look at the US Central bank， it's reliance on short term reaction to long term economic problems。 Never fixed the problems from the crash of 2008 and the economy will pay for it。。。 Wow。 Shows a deep and disheartening look at the US Central bank， it's reliance on short term reaction to long term economic problems。 Never fixed the problems from the crash of 2008 and the economy will pay for it。。。 。。。more
Jimmy
，
This was an eye-opening read。 Every American should read it to understand what's happened and is happening now to our economy。 This was an eye-opening read。 Every American should read it to understand what's happened and is happening now to our economy。 。。。more
Floris
，
The book is accessible， and at first sight convincingly brings the story of the author。 However， as a reader it is hard to judge whether everything the author writes is correct。 In economics many things are uncertain and causality is difficult to assert。 Therefore I do not like the certainty with which many things are written down。The book is lacking an extra layer of depth。 The author makes his thesis plausible but does not go in enough detail to fully support。 I cannot remember coming across a The book is accessible， and at first sight convincingly brings the story of the author。 However， as a reader it is hard to judge whether everything the author writes is correct。 In economics many things are uncertain and causality is difficult to assert。 Therefore I do not like the certainty with which many things are written down。The book is lacking an extra layer of depth。 The author makes his thesis plausible but does not go in enough detail to fully support。 I cannot remember coming across any graph or table at all。Therefore I may recommend it to the average reader， but not to anyone who likes to read books in which an economic theory is convincingly presented。 。。。more
Katie Boland
，
I do not understand the economy well but a lot of this made sense to me and was written in an accessible way。 He writes his conclusions in such a way to infer that everyone would agree with his conclusions as fact。 I'm not sure that is the case。 I do believe the underlying problems from 2008 have never been fixed and we keep putting band aids on top of band aids。 An alarming take with not a lot of solutions。 I do not understand the economy well but a lot of this made sense to me and was written in an accessible way。 He writes his conclusions in such a way to infer that everyone would agree with his conclusions as fact。 I'm not sure that is the case。 I do believe the underlying problems from 2008 have never been fixed and we keep putting band aids on top of band aids。 An alarming take with not a lot of solutions。 。。。more
Mustafa Olomi
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RTC
margaret
，
Just a simpleton trying to learn a bit about the Fed here！ This review will be written in 8th grade book report format。 So， the basic argument is that quantitative easing and low interest rates are making （~stoking~， as they like to say in financial articles） an asset inflation bubble， right？ They flood the markets with money and incentivize risky investments。 Lots of money means lots to invest， and low interest rates mean you make basically no money - or even lose money - on safer investments）。 Just a simpleton trying to learn a bit about the Fed here！ This review will be written in 8th grade book report format。 So， the basic argument is that quantitative easing and low interest rates are making （~stoking~， as they like to say in financial articles） an asset inflation bubble， right？ They flood the markets with money and incentivize risky investments。 Lots of money means lots to invest， and low interest rates mean you make basically no money - or even lose money - on safer investments）。 This also means that our economy is sitting on lots and lots of debt， especially corporate debt。 Leonard argues that this all drives inequality， since really only the top of the economy makes any money off asset inflation， and other economic markers， like wages， most notably， are flat。 I think I'd need to read quite a bit more about the Fed - and get some alternative viewpoints - to really be able to ~evaluate~ what Leonard is saying here。 He comes down pretty hard on private equity， though， and I'm with him on that one。 Screw 'em。 。。。more
Jiliac
，
I dislike that the author has this strongly moralist tone （already present in the title）， but I'm still rating this 5/5。There a lot of interesting information which is clearly explained。 Basically money is supply and demand。 The Fed increase the supply of money which increased the risk the financial economy was taking but it never really benefited the real economy because there was never a growth of the "demand" for money。（Now we have inflation， so probably finally the demand picked up。）I feel s I dislike that the author has this strongly moralist tone （already present in the title）， but I'm still rating this 5/5。There a lot of interesting information which is clearly explained。 Basically money is supply and demand。 The Fed increase the supply of money which increased the risk the financial economy was taking but it never really benefited the real economy because there was never a growth of the "demand" for money。（Now we have inflation， so probably finally the demand picked up。）I feel saying that the Fed "broke" the economy is a bit much though。Still would recommended if this kind of financial topics interest you。 。。。more
David King
，
This book is about the Federal Reserve （"Fed"） in the USA and the negative impact of quantitative easing （"QE"）。 Great book。 More relevant than ever today when inflation is about 8%。Is the Fed a bank？ "People talk about the Fed as if it were a bank， but it is really a network of regional banks，"What is the Fed's superpower？ "The Fed’s one superpower is its ability to create new dollars and pump them into the banking system。"What is QE？ Short answer: printing unlimited money"Hoenig said that quan This book is about the Federal Reserve （"Fed"） in the USA and the negative impact of quantitative easing （"QE"）。 Great book。 More relevant than ever today when inflation is about 8%。Is the Fed a bank？ "People talk about the Fed as if it were a bank， but it is really a network of regional banks，"What is the Fed's superpower？ "The Fed’s one superpower is its ability to create new dollars and pump them into the banking system。"What is QE？ Short answer: printing unlimited money"Hoenig said that quantitative easing was akin to making a “deal with the devil。”"between late 2008 and early 2010， the Fed printed $1。2 trillion。 It printed a hundred years’ worth of money，""The amount of excess money in the banking system swelled from $200 billion in 2008 to $1。2 trillion in 2010， an increase of 52，000 percent。"Why printing too much money is bad？ "Hoenig was fighting against quantitative easing because he knew that it would create historically huge amounts of money， and this money would be delivered first to the big banks on Wall Street。 He believed that this money would widen the gap between the very rich and everybody else。"Why interest rate at zero is a bad thing？ "In a zero percent world， things are different。 A bank earns much closer to nothing for stashing its money in an ultrasafe bond。 This pushes the bank to search for earnings out there in the risky wilderness。" Can they stop QE or stop printing money？ "Quantitative easing is like kudzu for market operators，” he said。 “It grows and grows and it may be impossible to trim off once it takes root。" 。。。more
Ashish Vyas
，
Detailed account of how central bank intervene in the market and over years the interventions have increased over years and more complex and difficult to reverse。 Must read
Bart Hubbard
，
Eye openingThe author lays the foundation for understanding a very complex， vitally important， and incredibly invisible part of how the financial world actually works。 The footnotes and references are helpful and provide an avenue to finding the source material and context necessary to get the most out of the book。 It’s written in a journalistic style that states things objectively and clearly。 This is a must read for anyone who invests， either directly or via a retirement program， etcetera。
Susan
，
The author explained difficult concepts clearly and it was an eye opening read。 Why do we just accept that people are doing the right thing only to find out in time， it wasn't necessarily？ The author explained difficult concepts clearly and it was an eye opening read。 Why do we just accept that people are doing the right thing only to find out in time， it wasn't necessarily？ 。。。more
Russ
，
The writer's bias and opinions cloud the objectivity of the book。 It does offer an interesting history of the modern Fed - a "how we got here" perspective。 I appreciate his inclusion of Thomas Hoenig who may have been the finest member in the Fed's history。 The writer's bias and opinions cloud the objectivity of the book。 It does offer an interesting history of the modern Fed - a "how we got here" perspective。 I appreciate his inclusion of Thomas Hoenig who may have been the finest member in the Fed's history。 。。。more
Cees Smit
，
Give very good inside in the Fed。
Aaron Michael
，
The Fed’s superpower is to create new dollars and pump them into the banking system。 “Between 1913 and 2008， the Fed gradually increased the money supply from about $5 billion to $847 billion。 This increase in the monetary base happened slowly， in a gently uprising slope。 Then， between late 2008 and early 2010， the Fed printed $1。2 trillion。”Banks give riskier loans when interest rates are low。 Yield is low on safe investments like bonds， so they make no money if it is not loaned out。Author’s ma The Fed’s superpower is to create new dollars and pump them into the banking system。 “Between 1913 and 2008， the Fed gradually increased the money supply from about $5 billion to $847 billion。 This increase in the monetary base happened slowly， in a gently uprising slope。 Then， between late 2008 and early 2010， the Fed printed $1。2 trillion。”Banks give riskier loans when interest rates are low。 Yield is low on safe investments like bonds， so they make no money if it is not loaned out。Author’s main propositions: The Fed creates inequality， benefitting the rich much more than the middle and lower classes; the Fed should less; Congress should do more。 。。。more
Jeff Lacy
，
One of those books you’re grateful to have readThis is an exceptional read。 Told as a story， but explains the operation of the U。 S。 Federal Reserve from around 2000 through 2021。 What is revealed is that through the dysfunction of our legislative process， our fiscal response has shut down to respond to our country’s economic health present and future。 As a result， the monetary function of the Fed has been the only tool in which to respond to market emergencies， especially the market crash of 20 One of those books you’re grateful to have readThis is an exceptional read。 Told as a story， but explains the operation of the U。 S。 Federal Reserve from around 2000 through 2021。 What is revealed is that through the dysfunction of our legislative process， our fiscal response has shut down to respond to our country’s economic health present and future。 As a result， the monetary function of the Fed has been the only tool in which to respond to market emergencies， especially the market crash of 2008。 The Fed’s quantitative easing policy never really faded once the asset markets and banks grew conditioned to the environment it created。 Over the years， as debt markets expanded nontraditionally， and asset inflation grew leading toward debt crash， the Fed stepped with the most far reaching rescue plan in its history。 In looking at the Fed’s actions， it became apparent that the beneficiaries were the banks， the market， large corporations， hedge funds， large investors， the people in top income brackets。 None trickled down to employees， to the middle class， etc。 The Fed’s policies were disruptive and kicked the problems to the next month， year， decade。 The long-term was ignored。 And with the Republican and McConnell Senate， legislation was frozen。 This is a clearly written book。 I took my time。 This was my first focused book on the Fed and I am grateful I read this one first。 It was easy to study and think about the concepts and events and understand Leonard’s story。 。。。more
Jim England
，
Easy to follow， straightforward， and logical breakdown on how the Federal Reserve's "ZIRP" zero-interest rate policies of the 2010s caused asset value inflation and spread inequality in America。 Easy to follow， straightforward， and logical breakdown on how the Federal Reserve's "ZIRP" zero-interest rate policies of the 2010s caused asset value inflation and spread inequality in America。 。。。more
Santiago
，
The Fed is broken and no one knows how to fix it。 Good luck to us all when the next bubble pops。
Cjwdhj
，
When America relied on the FED to address its economic problems， it replied on a deeply flawed tool。From Rate Cut to Quantitative easing to normalised QE to ZIRP to SPVs to CARESSo creative with the instruments but old fashioned with the underlying principle: flood the financial system with a lot of money。Monetary policy is so easy and fast than fiscal policy
John Sharp
，
If this book doesn't convince you that the Federal Reserve should be abolished， nothing will。 If it doesn't make you angry about what the Fed's policies have done to America and how they have fueled rampant inequality， nothing will。It is a well written book， explaining in an easy-to-grasp method of what the Fed， along with our completely inept Congress and Presidency， has allowed to happen。 How - at every opportunity - the Fed has bailed out the rich， Wall Street， hedge funds， etc。 all at the Am If this book doesn't convince you that the Federal Reserve should be abolished， nothing will。 If it doesn't make you angry about what the Fed's policies have done to America and how they have fueled rampant inequality， nothing will。It is a well written book， explaining in an easy-to-grasp method of what the Fed， along with our completely inept Congress and Presidency， has allowed to happen。 How - at every opportunity - the Fed has bailed out the rich， Wall Street， hedge funds， etc。 all at the American taxpayers expense。 I am not a financial expert by any means so I enjoyed it's down-to-earth language。 The Fed has created a lot of pain for future generations to go through。 After reading this book， I am not sure whether it's through malice towards every day Americans， or sheer hubris and ignorance。 Probably some combination of both with a huge helping of the Dunning-Kruger Effect。 。。。more
Thomas Vanorder
，
Excellent read for anyone looking to get into Monetary Policy Christopher Leonard does a fantastic job of telling a narrative story through the lens of a Fed governor's career， ending with the dramatic actions taken in 2020 and 2021。 Complex and intricate processes and policies are broken down into a format that someone new to the space can comprehend。Highly recommend！ Excellent read for anyone looking to get into Monetary Policy Christopher Leonard does a fantastic job of telling a narrative story through the lens of a Fed governor's career， ending with the dramatic actions taken in 2020 and 2021。 Complex and intricate processes and policies are broken down into a format that someone new to the space can comprehend。Highly recommend！ 。。。more
Tyler
，
Easy to read and understand why we are where we are。 Would be great for the ppl who think Biden is responsible for everything
Matthew Jacobs
，
Shocking， highly critical view of the actions of the Federal Reserve， especially over the past 20 years or so。 Surprising page-turner for a lot of it。
Brandur
，
Excellent - Leonard's writing is easily digestible without an advanced econ degree， while also tackling and unwinding the fanciful Fed language that's often used to obscure their decision-making。 The book sticks to the facts and manages to stay quite neutral， but you come out of it with a strong impression that the Fed's been the most important contributor to practically every economic crisis in the past thirty years， and like many federal institutions， has fallen victim to short-term wishful th Excellent - Leonard's writing is easily digestible without an advanced econ degree， while also tackling and unwinding the fanciful Fed language that's often used to obscure their decision-making。 The book sticks to the facts and manages to stay quite neutral， but you come out of it with a strong impression that the Fed's been the most important contributor to practically every economic crisis in the past thirty years， and like many federal institutions， has fallen victim to short-term wishful thinking over planning for longer term， well-distributed prosperity and stability。 For example， while the Fed wasn't any of the directly precipitating factors that led to the 2008 financial crisis （e。g。 they weren't selling risky repackaged ARMs）， by keeping interest rates close to zero and providing cheap money for so long， they were the major reason that banks were pushed so far down the risk curve in search of higher returns。 My one missive is that the book was written too early to cover our latest 2022 developments of high inflation and the Fed finally engaging in non-trivial rate hikes （0。75） for the first time in modern history — wouldn't been interesting to get Leonard's take on this。 。。。more
Rhonda
，
Spoiler alert: The Fed is the smoking gun。
David Allen
，
This was a phenomenal book for learning how Fed policy has evolved over the past two decades。 The author did a great job of briefly explaining technical concepts but not letting it derail the overall discussion。 More importantly， it gave attention to the various tools the Fed has available to them， how/when they have used them， and the expected vs actual effects that resulted from their use。 The only thing I would caution about reading this book is that the author tells a story but I believe he This was a phenomenal book for learning how Fed policy has evolved over the past two decades。 The author did a great job of briefly explaining technical concepts but not letting it derail the overall discussion。 More importantly， it gave attention to the various tools the Fed has available to them， how/when they have used them， and the expected vs actual effects that resulted from their use。 The only thing I would caution about reading this book is that the author tells a story but I believe he has a bias toward the point he wants to make， where the field of economics is vast and influenced by infinite variables that could also be affecting the Fed's actions as well。 That said， I think there is a lot of truth to this book that more people should know about and would highly recommend it。 。。。more
Richard Kravitz
，
This was a pretty interesting book， my 3rd by Leonard。 A bit too complex for me to understand completely， but I think I got the gist of it。 Seems that ultra-intelligent PhD's in Economics working at investment banking firms are coming up with obscure， high risk investment vehicles and packages that do nothing but siphon off money to the very wealthiest firms， and thus to the wealthiest Americans。 And the bulk of this money was / is created by the Federal Reserve， just printed， under a policy of This was a pretty interesting book， my 3rd by Leonard。 A bit too complex for me to understand completely， but I think I got the gist of it。 Seems that ultra-intelligent PhD's in Economics working at investment banking firms are coming up with obscure， high risk investment vehicles and packages that do nothing but siphon off money to the very wealthiest firms， and thus to the wealthiest Americans。 And the bulk of this money was / is created by the Federal Reserve， just printed， under a policy of "Quantitative Easing" （i。e。 low， low interest rates） and is funneled straight to the largest banks in the country via leverage and debt schemes that are understood by only the brightest minds in the finance field。I did learn the difference between "asset" inflation and "consumer" inflation。 That's important to understand。 I didn't even notice all the inflation of the 70's/80's， I was too busy working for $3。35/hr， going to college， partying and rock climbing。 Took out only $5K in student loans （SDSU was $200/sem） and got my degree in 1983 （graduated high school in '76）。 As bad as things were apparently， I just didn't notice and life seemed manageable during my early 20's。 Had my first official teaching job in '87 （I was 29）， Junior High Science in East LA （remember the movie "Colors"！） and earned $27K/yr， full benefits。 I was in hog heaven， started a 403B， that went bust in '98， started saving more and despite losing 25% the first 6 months of this year--well， it's still only on paper。 Just wish I would have bought a home last year， for my daughter to live in while she finished her last 3 years of college。I'm retired now with a public pension （STRS） I paid into for many years， my wife is a CLS who supervises a hospital blood bank （$70/hr）。 We do OK， sending our 3 kids to college sans loans （1 done， 1 a soph， 1 not attending college by choice）， solid equity in our house （CA）， about a 1/2-million in IRA's， newer cars （$12K still owing）--doing OK for the most part。 But people without a degree or a trade or strong sales ability are really struggling and the future looks bleak。I feel bad for young people， the economy is a mess and they are so wrapped up in the internet， social media and associated "app crap"， they don't stand a chance。 I mean they have to download apps to manage their money， what a crock！ I did convince my college grad （'21） to start a Roth， $100/month auto-withdrawal， but she is still working environmental research internships for $17/hr。， checking out the field to decide what she likes。Anyhow， Leonard is a good writer， it's a pretty quick read， puts a lot into perspective and you should learn something。 。。。more
Miranda
，
Informative and interesting。
Brian Schnack
，