Lessons from History

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A Monetary and Fiscal History of the United States, 1961–2021 — book reviewed by PETER CONTI-BROWN in F&D Magazine, March 2023.
The review assesses Alan Blinder’s account of monetary and fiscal policy across recent U.S. history, emphasizing implications for present policy disputes.

The world we live in was largely shaped by central bankers of the 1980s and 1990s.
Economists empirically demonstrated the relationship between central bank independence and price stability.
Central bankers expanded their influence beyond monetary policy to market stability, international diplomacy, pension reform, and fiscal policy.
Two major crises of this century are identified: the 2008 financial crisis and the 2020 global pandemic.
The 2020 crisis is characterized as “perhaps the biggest fiscal-monetary collaboration since World War II.”

Avowedly (neo-)Keynesian account in praise of technocrats and their political masters.
Defends central bank independence and argues there are right and wrong policy answers to economic questions.
Blinder discounts the characterization of central bankers as political actors.
The book is written with “Blinderian parentheticals” and biographical snippets, and is “laser-focused on history’s implications for present policy disputes.”

The review praises Blinder’s style and his focus on history’s policy implications.
The review’s principal critique: Blinder’s strongest weakness is his contention that central bankers are not political actors.
The reviewer argues the reality is more complicated: technocrats often give non-partisan advice, but they are also political in practice through worldviews and value judgments.
Example contrast: differing views on Fed policies in 2009 between Blinder and Allan Meltzer stem from distinct worldviews, not partisan labels.
In 2023, with the Fed leading global interest rate tightening in response to record inflation, central bankers will exercise value judgments under significant uncertainty.

Central bank independence remains a critical concept tied to price stability, but its political dimensions deserve greater scrutiny.
Policymakers and observers should:
- Appreciate how much politics central bankers will practice when making decisions under uncertainty.
- Recognize that technocratic advice can reflect underlying worldviews that shape policy choices.
Blinder’s book is framed as a vital resource for navigating fiscal-monetary tensions in current and future policy debates.

Source: Lessons from History — review by PETER CONTI-BROWN, F&D Magazine, March 2023.

F&D March 2023: Lessons from History - Book Review
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