A Popular History of the Fed

tags : [[Federal Reserve of the United States]] [[central banking]] [[populism]]

source : Phenomenal World | A Popular History of the Fed

Notes

• The US Federal Reserve is one of the most powerful financial institutions in the world
• Progressive [[liberals]] believe that central banking can be used for “the public good”
• The origins of the US Federal Reserve go back to the American Populist Party
• [[Abraham Lincoln]] pushed the use of Greenbacks during the [[United States Civil War]], and Populists in the 1880s thought that this was the precedent they needed for the state to regulate financial policy
• Opponents of this plan were people who wanted the United States to move to a [[fiat currency]] and off of the [[gold standard]]
• “The United States is not a country with a central bank; it is a central bank with a country.”

Summary

The Federal Reserve was born out of a despite time in American history where state power was needed to reign in the worst excesses of finance. For example, poor rural farmers, where speculation is an important part of being a farmer, benefitted from the decision to create a central bank. This populist origin may explain some of the Fed’s behavior.