A former staffer at the Federal Reserve Bank of Dallas has criticized the central bank, saying economists employed there don’t know how finance and the economy works, the Wall Street Journal reported.
Danielle DiMartino Booth was hired as an adviser to Richard Fisher, a former president of the Dallas Fed who also criticized quantitative easing—the Fed’s accommodative monetary policy following the financial crisis that increased the bank’s balance sheet to roughly $4.45 trillion.
Booth has written Fed Up: An Insider’s Take on Why the Federal Reserve Is Bad for America, a book outlining her experience and opinion of the central bank. It will be available for purchase next Tuesday.
Booth says that Federal Reserve economists use theoretical models to form their monetary policy decisions, which she says led them to miss the forces that contributed to the financial crisis. After the crisis, she says the Fed implemented the wrong remedies to revive the economy.
"Global systemic risk has been exponentially amplified by the Fed’s actions," Booth says. "Who will pay when this credit bubble bursts? The poor and middle class, not the elites."
Booth says many books about the Fed’s actions following the financial crisis have been written to make Fed officials look as good as possible because they are often written by the principals themselves.
"Ms. Booth describes a tribe of slow-moving Fed economists who dismiss those without high-level academic credentials," the article states. "She counts Fed Chairwoman Janet Yellen and former Fed leader Ben Bernanke among them."