Secrets of the Temple Analysis
SECRETS OF THE TEMPLE is a big book with a correspondingly big agenda. It is a history of the Federal Reserve Board (the Fed) under Paul Volcker-- the action taken, their financial and political context, and the consequences for the national economy--but other major themes run through the narrative as well.
The tremendous impact the Fed’s actions have upon politics and the economy lead to the theme expressed in the book’s subtitle: “How the Federal Reserve Runs the Country.” The Fed is a quasi-governmental appointed body, yet its power rivals that of Congress and the presidency. As Greider explores the implications of this, he presents a history of the Federal Reserve System and explor res the monetary history of the United States.
Closely related to the Fed’s power is another major theme: the nature of money and the modern financial system. Indeed, the social, political, and economic importance of finance is so profound that the book could have been aptly subtitled “the triumph of money” (which is in fact the title of the final chapter). The discussion includes a daunting psychohistory of money (Sigmund Freud makes a surprise appearance) and a fascinating history of the Populist movement active at the turn of the century.
There is a wealth of objective information presented, but ultimately Greider has a point to make: Decisions about money are also political and social decisions. By ceding monetary authority to the Federal Reserve, the American political system has implicitly chosen capitalism over democracy. The Fed makes the tough political decisions, and it has repeatedly chosen financial considerations over the needs of the real economy. It is unfortunate that the book’s length will scare some people away, because here is a clear, thought-provoking presentation of an important and little-understood topic.
Sources for Further Study
Business Week. January 25, 1988, p. 18.
Commonweal. CXV, May 6, 1988, p. 280.
The Economist. CCCVI, February 6, 1988, p. 87.
Forbes. CXLI, February 22, 1988, p. 104.
Fortune. CXVII, February 1, 1988, p. 108.
Library Journal. CXII, December, 1987, p. 100.
Los Angeles Times Book Review. December 13, 1987, p. 1.
The Nation. CCXLVI, January 23, 1988, p. 93.
The New York Times Book Review. XCIII, January 17, 1988, p. 7.
The Wall Street Journal. January 6, 1988, p. 13.
Secrets of the Temple
William Greider, a political journalist with Rolling Stone and formerly assistant managing editor for The Washington Post, understands the relationship between politics and the economy. He has written perspicaciously on both in national magazines and has published a book titled The Education of David Stockman and Other Americans (1982). In Secrets of the Temple: How the Federal Reserve Runs the Country, Greider has written a remarkably clear exposition of monetary policy, its importance to economic development, and its interaction with politics. Greider is primarily concerned with the Federal Reserve System (commonly referred to as “the Fed”) during the tenure of Paul Volcker. To set the stage and illuminate the operations of the Fed, however, he provides a review of monetary policy throughout the nineteenth century, the origins of the Fed in 1914, its workings during the 1920’s and restructuring in the 1930’s, and its emergence after World War II as the primary economic regulator. Indeed, next to the president himself, Chairman Volcker became the most influential man in the United States. What he and the Board of Governors decided has economically helped or hurt every American.
Given the Fed’s enormous power, why do Americans know so little about it? Greider’s answer is that the Fed has always kept a low profile, lest it become the center of public controversy and have its traditional independence threatened by popular politics. That independence has always been prized by the private bankers who shaped the system in the beginning and who continue to dominate it. They have a vested interest in keeping the Fed cloaked in as much mystery as...
(The entire section is 2,430 words.)