Crises seem to fall outside the purview of our understanding of how things work. They appear as exceptions and black swans; they require quick action and unprecedented responses that throw overboard careful planning and democratic procedure. Not understandable as a regular phenomenon, the global financial crisis, when it broke, similarly was treated as a singular occurrence, unique in its enormity. Yet plenty of writers have sought to make sense of the crisis in its aftermath. They have explained it as an unintended outcome of the complexity of financial instruments, as a result of masculine greed and animal spirits getting the better of reasonable conduct, and as a perhaps not so exceptional event emerging from the contradictions of internationalized finance capitalism. Fed Power injects into these efforts a distinctive interpretation, one that draws on core concepts of Political Science, and in particular the concept of power. It does so in a hard-hitting and colloquial style that makes for great reading, offering a new understanding of the crisis as linked to normal, humdrum politics.

The star villain of the book is the Federal Reserve Bank of the United States. The Fed was the main player in the rescue of the financial industry after the collapse of Lehman Brothers. But unlike Congressional actions such as the Troubled Assets Relief Programme (TARP), its interventions have garnered little critique. Instead, the Fed has emerged as a heroic, technical entity that rescued the economy in the face of looming disaster. Jacobs and King destroy this understanding of the Fed as a neutral agency transcending politics. While it may be true that the Fed was able to act quickly in the face of crisis in a way that Congress could not have, the authors show that its interventions were profoundly biased, favoring those with disproportionate wealth and income and deepening further existing inequalities. They take the Fed to task for the preferential treatment of finance and the rich after the crisis while throwing homeowners and holders of consumer credit to the dogs. But more so, they hold the Fed responsible for creating the crisis.

The core of Jacobs and King’s argument is based on institutionalism. The Fed has acquired its strength and autonomy as a result of historical decisions that have put it on the path to become the behemoth it is today, accountable to nobody. Designed as a supposedly-neutral arbiter to overcome the raucous, populist clashes over monetary policy in the late nineteenth century, the private sector played a key role in its founding. From the beginning, the legislation setting up the Fed institutionalized the inclusion of private banks in making decisions about monetary policy; and indeed, they participate to this day in the Fed’s Open Market Committee. After the Great Depression the Fed was given emergency powers to intervene as it deems appropriate “in unusual and exigent circumstances” (p. 30), powers it used for the first time in 2008–2009.

A second strand of argument identifies the way in which the rules by which the Fed operates function to exercise power. Jacobs and King call it “the Fed’s favoritism.” They identify in particular three practices: the revolving door between Wall Street and the Fed; its capture by lobbyists and by shared mindsets (“cultural capture”); and the Fed’s interest in the success of Wall Street deriving from the fact that it generates income from investing there to cover its expenses. The Fed thus emerges as a deeply-biased institution, which affects its policies and its conduct as it puts out the fires of a crisis.

All this, Jacobs and King tell us, works only through a process of what Hoziç and True have called “scandalous obfuscations” (Scandalous Economics: Gender and the Politics of Financial Crises, 2016): the concealment of advantage, complicit silences that suffocate scrutiny (such as withholding information from Congress as it discussed the Dodd-Frank reforms), and the cooptation of researchers who benefit from their association with the Fed. As a result, the Fed today suffers from a profound problem of legitimacy. Moreover, having had its wings clipped through the Dodd-Frank act, it has lost its capacity for decisive intervention in the next crisis, which the authors already see on the horizon. Their vision for reform is inspired by the Canadian model, which divides responsibilities for managing the money supply and regulating the financial sector between the Bank of Canada and the Office of the Superintendent of Financial Institutions (OSFI). The results have been much stricter financial regulations, a crisis much less severe, and the continued trust of Canadians in their financial regulators.

Rather than seeing the Fed as the solution to financial instability and periodic crises, the authors thus identify it as the problem. In doing so, they demonstrate that crises are not outside comprehension. Rather, crises are part of a normal politics produced by the biases of institutions; and indeed they may aggravate such a biases in the name of providing technical solutions.

The book makes visible the ugly extremes of these solutions, lifting obfuscations, and recalling key moments that enabled institutional pathways. It provides persuasive evidence of the Fed as at once deeply influential and profoundly biased in complex ways. And yet the insistent pointing at one culprit makes one wish for a little more modesty in the claims made. Can the responsibility for the crisis and its scandalous solutions really be laid on the doorsteps of just one rogue institution? What may not get enough attention in this explanation is, on the one hand, the force of ideology, the power of a hegemonic form of hawkish expertise founded in an orthodox economics that agrees on “the fundamentals.” On the other hand, the focus on institutions may underestimate the imbalance of power in society, the predominance of finance capital in its masculinist and classist dimensions not just in the Fed State but in the American polity more broadly.

Nevertheless, Jacobs and King do a huge service by making visible the pernicious aspects of a particular form of technocratic governance, i.e., Fed power. And in so doing, they help us think about crises in a new way, as an outcome of institutional processes—perhaps not intended, but certainly also not unmoored from familiar, everyday power politics.