from The Daily Bell:
Booth says many books about the Fed’s actions following the financial crisis have been written to make Fed officials look as good as possible because they are often written by the principals themselves.
A former Fed adviser in Dallas has criticized central bank economists for not understanding economics. Danielle DiMartino Booth was a financial journalist who warned about a real estate crash due to overly low interest rates. She was hired as an adviser to Richard Fisher, a former president of the Dallas Fed, who felt similarly when it came to rates. Over time she became his eyes and ears in examining Fed policy and criticizing it.
Now she has written a book,”Fed Up: An Insider’s Take on Why the Federal Reserve Is Bad for America,” that is just becoming available.
Federal Reserve economists use theoretical models to form their monetary policy decisions, which she says led them to miss the forces that contributed to the financial crisis. After the crisis, she says the Fed implemented the wrong remedies to revive the economy.
“Global systemic risk has been exponentially amplified by the Fed’s actions,” Booth says. “Who will pay when this credit bubble bursts? The poor and middle class, not the elites.”
For Ms. Booth, “slow-moving” Fed economists will inevitably miss what’s really going on and substitute low interest rates for other solutions. Fed Chairwoman Janet Yellen and former Fed leader Ben Bernanke are two of the slow-moving acadmics that come in for criticism.
The Wall Street Journal did a review that tied the book into a push “for more diversity at the central bank. … A broader range of educational and professional backgrounds also would widen the central bank’s perspective.”
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