What do you think?
Rate this book
Who Needs the Fed?: What Taylor Swift, Uber, and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank
The Federal Reserve is one of the most disliked entities in the United States at present, right alongside the IRS. Americans despise the Fed, but they’re also generally a bit confused as to why they distrust our central bank.
Their animus is reasonable, though, because the Fed’s most famous function—targeting the Fed funds rate—is totally backwards. John Tamny explains this backwardness in terms of a Taylor Swift concert followed by a ride home with Uber.
In modern times, he points out, the notion of credit has been perverted, so that most people believe it’s money and that the supply of it can therefore be increased. This false notion has aggrandized the Fed with power that it can’t possibly use wisely. The contrast between the grinding poverty of Baltimore and the abundance of Silicon Valley helps illustrate the problem, along with stories about Donald Trump, Robert Downey Jr., Jim Harbaugh (the Michigan football coach), and robots.
Who Needs the Fed? makes a sober case against the Federal Reserve by explaining what credit really is, and why the Fed’s existence is inimical to its creation. Readers will come away entertained, much more knowledgeable, and prepared to argue that the Fed is merely superfluous on its best days but perilous on its worst.
Their animus is reasonable, though, because the Fed’s most famous function—targeting the Fed funds rate—is totally backwards. John Tamny explains this backwardness in terms of a Taylor Swift concert followed by a ride home with Uber.
In modern times, he points out, the notion of credit has been perverted, so that most people believe it’s money and that the supply of it can therefore be increased. This false notion has aggrandized the Fed with power that it can’t possibly use wisely. The contrast between the grinding poverty of Baltimore and the abundance of Silicon Valley helps illustrate the problem, along with stories about Donald Trump, Robert Downey Jr., Jim Harbaugh (the Michigan football coach), and robots.
Who Needs the Fed? makes a sober case against the Federal Reserve by explaining what credit really is, and why the Fed’s existence is inimical to its creation. Readers will come away entertained, much more knowledgeable, and prepared to argue that the Fed is merely superfluous on its best days but perilous on its worst.
224 pages, Hardcover
Published May 24, 2016
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 10 of 10 reviews
May 20, 2016
Before reading this book I was very indifferent about the Fed. I certainly didn't love it but I also didn't hate it vehemently like other do. After reading this book though I am definitely on the "end the fed" side of the debate. One of the biggest arguments that made me feel this way is that of price controls. I have never been a fan of price controls, they simply don't sense for so many reasons. The Fed though, is no different, as it controls the price of credit for millions of people. I never thought of it this way and that really started to turn the tables for me.
Moreover, the Fed's price controlling takes resources away from the economy where they are sometimes needed most. This hinders innovation and economic progress. Consequently, the actions of the fed make our recessions longer and deeper than they actually need to be. Markets are just too complex for a small group of individuals to "know" what's best for millions of Americans. While the Fed's policies can help some, they harm millions of others.
Another interesting point that the book describes is that credit is not money. Credit gives you money which gives you access to real economic resources (e.g. raw materials, computers, shipping trucks, etc.). However, the Fed always thinks of credit in terms of dollars. This disconnect on they they consider credit and what credit actually is for everyone else leads to some of the disastrous policies the Fed has enacted.
I highly recommend this book anyone who is in my position prior reading this book (i.e. you don't know how you feel about the Fed) as it gives you great perspective on what life could be without the Fed.
Moreover, the Fed's price controlling takes resources away from the economy where they are sometimes needed most. This hinders innovation and economic progress. Consequently, the actions of the fed make our recessions longer and deeper than they actually need to be. Markets are just too complex for a small group of individuals to "know" what's best for millions of Americans. While the Fed's policies can help some, they harm millions of others.
Another interesting point that the book describes is that credit is not money. Credit gives you money which gives you access to real economic resources (e.g. raw materials, computers, shipping trucks, etc.). However, the Fed always thinks of credit in terms of dollars. This disconnect on they they consider credit and what credit actually is for everyone else leads to some of the disastrous policies the Fed has enacted.
I highly recommend this book anyone who is in my position prior reading this book (i.e. you don't know how you feel about the Fed) as it gives you great perspective on what life could be without the Fed.
May 10, 2017
This is a book about credit. What it is, what it is not. How the Fed can't really control it. How every dime the government spends is that amount of less credit in the economy. How lowering interest rates in a recession is dumb. How bailing out banks is even dumber. How we should be worried about overall government spending, not deficits (in case you haven't picked it up yet, ALL government spending is deficit spending). How manipulating the dollar never works. How regulators are always a day late and (many a) dollar short (if they knew what they were doing, they'd be making billions on Wall Street). How private insurance would gladly replace the FDIC if given the chance. How supply-siders should not be proud of the fact that lower rates will often increase tax receipts (why on earth would you want to increase receipts?). And so on and so on. Some of this is common sense; some of it takes some solid thinking. Many, many shibboleths destroyed.
May 29, 2018
Interesting positions and helpful for making some concepts easier to understand, but overall far too repetitive and seemed to drag matters out for much longer than needed.
March 11, 2024
The author leans to abolishing the Federal Reserve or any central bank, but if you lean the other way, I think you could read this and end up somewhere in the middle with your opinion. Fun, light read if you are interested in the topic.
October 29, 2017
Witty.
A little crazy.
Witty.
A little crazy.
Witty.
November 14, 2019
Very good outline about why the Fed is superfluous.
December 30, 2019
An excellent book showing how the economy really works, and then how the Federal Reserve has far less of an influence on things than many people think.
It is an easy read.
It is an easy read.
July 4, 2016
This 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 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.
The basic point here is that credit is not money, but access (through real savings) to real economic resources, and that 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. 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.
The basic point here is that credit is not money, but access (through real savings) to real economic resources, and that 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. 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.
September 4, 2016
Not sure that monetary policy and an independent central bank are not necessary and harmful as claimed. Biggest gap in his thesis is not explaining the difference between liquidity crisis and solvency crisis in a systemic banking crisis. Only focuses on both on individual banks.
Another area where I have fundamental disagreement is that the Fed has no impact on the value of the dollar. Interest rates do affect exchange rates and the dollar. Since the Fed can affect interest rates as it carries out interest rates the Fed does affect the value of the dollar.
Has the Fed done too much for too long post the financial crisis? Agreed, yes. During the financial crisis? Disagree, no. Do we still need a central bank? Disagree, yes.
Another area where I have fundamental disagreement is that the Fed has no impact on the value of the dollar. Interest rates do affect exchange rates and the dollar. Since the Fed can affect interest rates as it carries out interest rates the Fed does affect the value of the dollar.
Has the Fed done too much for too long post the financial crisis? Agreed, yes. During the financial crisis? Disagree, no. Do we still need a central bank? Disagree, yes.
June 11, 2016
Excellent explanation of the real source of credit and why the Fed can't control it! Also pokes some holes in supply-side thinking and the Austrian school's theory of boom-busts. Short, breezy read, very well done.
Displaying 1 - 10 of 10 reviews