Who Needs the Fed? What Taylor Swift, Uber, and Robots Tell Us About Money, Credit, and Why We Should Abolish America’s Central Bank – by John Tamny
Talk about an enticing sub-title! This book started off strong–with a fantastic and insightful analogy involving Uber and Taylor Swift–but got bogged down in repetitive and occasionally confusing detail. I'm not sure why, but I had a very difficult time concentrating while reading it. Tamny carves out some intriguing positions about the Federal Reserve and its role in the credit economy, at times criticizing everybody: the Austrians, the Moneterists, and the Keynesians. Most interesting to me was his strong critique of the Fed's role in the Austrian conception of the business cycle, and the banking system's use of fractional reserve lending. I'd like to find an Austrian who engages that critique.
Tamny's basic point here is that credit is not money, but access (through real savings) to real economic resources, and the Fed doesn't really control it. He provides a lot of examples illustrating this. The Fed, Tamny argues, is incapable of doing both the good its supporters think it does and the bad that critics attribute to it. It's neither the savior of the economy nor the bogeyman responsible for all its woes. So the Fed can't create credit but can only partially redirect it to unwise and inefficient uses; it cannot use inflation to manage unemployment. Similarly, government cannot spend us into prosperity, because any resource it gets is acquired from others who would inherently employ it more effectively on their own.
It went in far too long and I felt like I re-read many of the same sentences multiple times. That said, it's a worthwhile popular-level contribution to an important subject otherwise ignored by the mainstream press.