Do the Fed’s efforts to stabilize the economy worsen inequality?

The Federal Reserve, the U.S. central bank, was built for a monetary system composed primarily of investor-owned, government-chartered banks. But over the years, the erosion of banking law and the rise of alternative forms of money created outside of the banking system have pushed the Fed to take on more and more responsibilities to keep the economy out of recession, as it did during the 2008 crisis, and again during the first months of the COVID-19 pandemic, when it created $3 trillion to stop another financial panic.

Legal scholar and former Treasury official Lev Menand explains how the Fed did this, and argues that it is time to cure the disease that has plagued the American economy for decades, and not just rely on the Fed to treat its symptoms. The Fed Unbound is an urgent appeal to Congress to reform the U.S. economic and financial infrastructure.
“A clear and cogent assessment of how the nation’s central bank might be reformed.” —Kirkus Reviews

“A fascinating and deep analysis of what has gone wrong with the American financial system. Lev Menand peels back the layers of mythology and hagiography surrounding the Federal Reserve, to reveal just another government agency that fell in love with deregulation and now struggles with the consequences. The rise and rise of the repo market is central to how a stable and well-functioning financial system became so precarious. This is a must read for anyone who cares about macroeconomic policy and the future of the global economy.” —Simon Johnson, professor at MIT Sloan, and co-author of 13 Bankers

“No American institution is more important, or more opaque to the outsider, than the Fed. Now, Lev Menand has somehow, magically, made its functioning, its history, its limitations, and its possible futures completely lucid, even for the non-mathematically inclined, and, along the way, managed to sound several alarms about the risks even the most well-meaning opaque institution presents to democracy.” —Adam Gopnik, author of A Thousand Small Sanities: The Moral Adventure of Liberalism