“Forget Stephen King. For readers determined to decipher the baffling collapse of Wall Street, David Wessel’s account of what has transpired behind closed doors in Washington over the past couple of years provides a tale that’s nothing short of hair-raising.”
—Paul M. Barrett, The New York Times Book Review
In the paperback release of his bestseller, WSJ Economics Editor David Wessel updates his probing narrative of the Fed’s actions during the financial firestorm with an analysis of how the US economy – and Ben Bernanke – fared in 2010.
AVAILABLE IN PAPERBACK AUGUST 3rd
In FED We Trust
Ben Bernanke’s War on the Great Panic
By David Wessel
For more than twenty years, David Wessel has been The Wall Street Journal’s insider at the Federal Reserve. With continual access to its chairmen, governors, policy makers, and staffers, Wessel has an insider’s view of the biggest ongoing story of our time. In the paperback release of IN FED WE TRUST: Ben Bernanke’s War on the Great Panic (Three Rivers Press; August 3, 2010; $16.00), Wessel’s authoritative and penetrating account of how the Fed effectively became the fourth branch of government, Wessel updates his analysis of the financial crisis with an epologue looking at what transpired in the second year of the crisis.
Since our current financial crisis began, the Fed has been forced to make a series of precedent-shattering decisions,” says Wessel. “The Great Panic (as it’s been called) is much bigger—in price tag, geographic scale, and duration—than lesser recessions that occurred in the late twentieth century. But the actions the Fed took in response challenged not only the ideology of capitalism but also the essence of democracy.”
The subprime mortgage mess was made in America, and that meant the U.S. government had to lead the clean up. As head of the most powerful economic institution in the world, Ben Bernanke had more immediate authority to do that than any other individual. As Wessel notes in IN FED WE TRUST, “The president of the United States can respond instantly to a missile attack with real bullets; he cannot respond instantly to financial panic with real money without the approval of Congress. But Bernanke could and did.” The scope and price tag attached to his decisions was staggering. Some of the extreme actions the Fed took in a period of fewer than six months were:
Shattered seventy years of tradition by lending $30 billion to Bear Stearns, an outfit it neither regulated nor officially protected, to induce JPMorgan Chase to buy the flailing investment bank
Seized Fannie Mae and Freddie Mac, the government-sponsored, shareholder-owned mortgage giants
Pressed the FDIC to invoke an emergency law to subsidize Citigroup’s attempt to strengthen itself by acquiring Wachovia
After a desperate but unsuccessful search to find a buyer for Lehman Brothers, Bernanke, Geithner, and Paulson allowed it to fail
In a new epilogue added to the paperback edition of IN FED WE TRUST, Wessel writes “If Ben Bernanke had hung a banner from the Fed’s headquarters early in the spring of 2010, the honest slogan would have read: “It could have been worse.” The U.S. economy was far from healthy. But by the spring of 2010, it was clear that the actions of Bernanke’s Fed and the Bush and Obama administrations had averted a repeat of the Great Depression—no small accomplishment.”
Wessel can discuss in interview:
Where the U.S. economy stands on the third anniversary of the start of the crisis, and what can we expect as we move toward the fourth?
What the Bernanke Fed got right, and what it got wrong?
What it was like inside the Fed, being the first responder to what was the financial equivalent of 9/11, while capitalism appeared to be crumbling?
Which of the Fed’s actions stretched—or even ripped through—the Fed’s legal authority? What chilling numbers and indicators made them feel they had no choice?
What we know now that we didn’t know when the crisis peaked in September 2008?
What tough decisions the Fed faces now?
How the Fed’s role will change with the new financial-regulatory reform legislation, the most significant rewrite of the rules of finance since the 1930s.
A perceptive look at a historic episode in American and global economic history, IN FED WE TRUST illuminates this drama in terms you don’t need to be a Wall Street insider to grasp. While it is the story of the Bernanke Fed abandoning “failed paradigms” in order to “do what needed to be done,” it is also a story about a handful of people—overwhelmed, exhausted, besieged, constantly second-guessed—who found themselves assigned to protect the U.S. economy from the worst economic threat of their lifetimes.
For more information, please visit: www.InFEDWeTrust.com.
DAVID WESSEL is economics editor of The Wall Street Journal. He also writes the “Capital” column, a weekly look at the economy and forces shaping living standards around the world. He has shared two Pulitzer Prizes, one for Boston Globe stories in 1983 on the persistence of racism in Boston and the other for stories in 2002 in The Wall Street Journal on corporate wrongdoing. A 1975 graduate of Haverford College, he was Knight Bagehot Fellow in business and economics journalism at Columbia University in 1980–81. David appears frequently on CNBC and National Public Radio.
**David Wessel is currently available for interview. For more information, please contact Dennelle Catlett at firstname.lastname@example.org or 212-782-9486. **
IN FED WE TRUST By David Wessel
On-sale: August 3, 2010; Three Rivers Press; Paperback; 336 pages; ISBN: 978-0-307-45969-5; Price: $16.00