Economics/Class Relations

The People Versus The Unelected

Review of “The Lords of Easy Money” by Christopher Leonard, plus a Q&A with the author

The “Lords of Easy Money,” clockwise from top left: Ben Bernanke prepares his cryogenic journey, Jay Powell accidentally signals five more rate hikes, Alan Greenspan cheered by an ancient memory of refusing a child beggar, Janet Yellen attends Halloween Party as George Washington


Review of The Lords of Easy Money, by Christopher Leonard, Simon and Schuster, 384 pages

Click here for Q&A with the author.

In Chicago on July 8, 1896, a former Nebraska congressman named William Jennings Bryan strode onstage at the Democratic National Convention and delivered one of the most famous speeches in American history. A populist and free silver advocate, Jennings stood in opposition to the Wall Street-backed Republican Party, which sought more power for creditors by supporting a gold standard. “You shall not press down upon the brow of labor this crown of thorns,” Bryan thundered, to close his address. “You shall not crucify mankind upon a cross of gold.”

Bryan’s speech can feel inaccessible today because it belonged to an era when “managing the money supply was still in the public realm of democratic action,” as author Christopher Leonard puts it in his remarkable book The Lords of Easy Money. The fights that now take place in the secrecy of the Federal Reserve were then a near-constant concern of congress and a source of bitter conflict between east and west, rich and poor, city-dwellers and farmers. Silver dollars had the de facto impact of increasing the money supply and making farm or prospecting debt easier to repay, while the “organized wealth” Bryan opposed sought a gold standard to keep returns on those loans high. The “Cross of Gold” speech came just after a Great Financial Panic in 1893, and though he would lose to William McKinley, Bryan set the terms for generations of controversies about who got to control the levers of finance.

On May 15, 2010, at a similar juncture a few years removed from a financial crash, a little-known Federal Reserve Bank president from Kansas City named Thomas Hoenig gave a controversial interview to the Wall Street Journal, called “The Fed’s Monetary Dissident.” Hoenig spoke as the economy was pulling out of the 2008 emergency, and as a voting member of the Federal Open Market Committee or FOMC, which helps set interest rates, he took the rare step of publicly disagreeing with peers. “We’ve gotten through the crisis,” he said. “We ought to be thinking about the long run.” Hoenig violated an unspoken taboo, reminding readers that the Fed’s work isn’t just a technocratic process, but “also an allocative policy,” i.e. one that helped pick society’s economic winners and losers — the stuff of politics.


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