The Lords of Easy Money

The Lords of Easy Money — summary

A 64-year-old man in a hotel room, doing something nobody wanted him to do

It was a chilly morning in early November 2010, and Thomas Hoenig was getting dressed in a quiet room at the Fairmont Hotel in Washington, DC. He was president of the Federal Reserve Bank of Kansas City, a banker most Americans would never hear about, in a city most of them had never visited. He knew exactly how the day would end. The Federal Open Market Committee was about to vote on something called QE2: a plan to create six hundred billion brand-new dollars and inject them into Wall Street over a few months. Eleven of the twelve voting members would say yes. Hoenig would say no. He would lose.

He went down to the lobby anyway. Other regional Fed presidents were waiting in the carpool. They all climbed into the same nondescript van and were driven to the Eccles Building, where the rest of the most powerful committee in global finance was already gathered around a polished oval table the size of a small swimming pool. When Hoenig's turn came to vote, he leaned slightly forward and used the same two words he had been turning over in his head for weeks. "Respectfully, no." Ben Bernanke, the chairman, paused for half a beat, then suggested everyone go grab coffee. The vote was over.

This is the moment Christopher Leonard uses to crack open his book, and it is the perfect entry point. Because what happened next was not a footnote. It was a turning point. Hoenig's lone dissent began a decade in which the Federal Reserve printed trillions of dollars, propped up financial markets through every wobble, and accidentally rewrote the deal between American capitalism and the people living inside it. The Lords of Easy Money is the story of how that happened, who benefited, who paid, and why almost nobody outside a few rooms in DC and Manhattan ever got a vote.