Everyone hates the Fed. If there’s one thing that unites the increasingly polarized left and right of American politics, it’s that the Federal Reserve is a mess. Either the Fed is focusing on inflation alone when it should be equally worried about unemployment, as critics argued in the 1990s, or it’s inventing unprecedented new government interventions that might as well be printing money, as critics of Ben Bernanke argued more recently. The Fed is wrong when it doesn’t bail out Lehman Brothers, because why did it let the economy collapse. And it’s wrong when it bails out AIG, because suddenly it’s created institutions too big to fail. It’s wrong for keeping interest rates too low too long as it did in the 2000s, and it’s wrong for not regulating mortgage lending as it was supposed to—the Federal Reserve just can’t do anything right.

In this intellectual and political morass it would be extremely helpful to have a guide to how exactly to evaluate the Fed. Peter Conti-Brown’s thoughtful new book falls short of being that guide, but he does get us some of the way there.

Conti-Brown begins by describing what he says is the standard understanding of the Fed: that the current structure and operations of the Fed are guaranteed by law; that the Fed is, essentially, one person, the Chair of the Federal Reserve Board of Governors; that the main task of the Fed is to prevent the president from politicizing the operation of monetary policy; that that politicization would take the form of too-easy money used to buy re-election for political incumbents; and that the Fed can avoid politicization because its task is a technocratic one that can be conducted free of value judgments.

Through a detailed but unsystematic history of the Federal Reserve drawing mostly on secondary sources and internet sources, Conti-Brown explodes each of the elements of this understanding, some more usefully and thoroughly than others. He shows that the dominance of the Chair is not in the statutes, but is an artifact of mechanisms that can vary over time, such as shutting out the other governors from contact with the Fed staff; likewise, the very funding of the Fed is not a matter of law but of practices that have emerged over time. Conti-Brown argues that actors other than the Chair have influence over the Fed’s actions. Internally these include staff lawyers and economists and the Federal Reserve Banks (the last of which are the subject of an extraordinary chapter arguing that the current governance of the Federal Reserve Banks is unconstitutional—the issue turns on whether the heads of the Reserve Banks are “Officers of the United States” [pp. 103–126]).

Externally the actors with influence over the Fed include not just the president, but also Congress, and the wider community of private bankers, international central banks, and academic economists. Conti-Brown argues that the idea that the Fed should be independent is more recent than we think, dating only to Paul Volcker (pp. 135–139), and notes that the Fed has mandates beyond price stability, including supervision and regulation of the banking system.

With the exception of the 1970s and 1980s, when inflation led the Fed to take a somewhat contrary position, the picture of the Fed that emerges from this book is of an institution that largely follows the conventional thinking of its time, because it is enmeshed in wider public and private, academic and political, networks. Conti-Brown concludes with proposals for reform, arguing that personnel is policy and the right reforms would find the right people and make them democratically accountable but otherwise leave them free to take the decisions they think best. Thus he approves of Dodd-Frank reforms and suggests further reforms in the appointment process, but criticizes reforms that would micro-manage the Fed through extensive audits or by stipulating explicit rules.

These are all stimulating debates, but they are underwhelming because, in the end, the underlying question here is: are the Fed’s policies right? And without some discussion of what exactly the right policies would be, it’s impossible to evaluate the structure or personnel. What’s the counterfactual? What would a truly independent Fed do, and what would a non-independent Fed do? What would a reformed Fed effectively do? Conti-Brown avoids a systematic analysis of when the Fed has been right and when it has been wrong, and therefore it is not clear what his preferred reforms are actually intended to accomplish. Without a clear explanation of what the stakes are in the debate, the historical details are interesting, but not particularly instructive about the best way forward.

For example, even if we avoid the difficult question of determining what would be the correct course of monetary policy, it is clear in retrospect that the Fed should have stepped in to regulate mortgage lending in the 1990s and 2000s. This was perhaps the most important omission in recent Fed history. But it is hard to imagine any of Conti-Brown’s proposed reforms addressing a problem of this nature. Conti-Brown suggests that Fed governors should be given one nonrenewable ten-year term and Fed chairs a five-year term renewable only once (p. 250). Is there any reason to think that this would have increased regulation of mortgages? It seems clear that the reasons mortgages were not more heavily regulated are much wider than that—having to do with the way mortgages had become the centerpiece of American political economy, such that even progressive watchdogs did not start complaining until very late in the game, because to prevent the spread of mortgages would have been to prevent Americans from grabbing the first rung of the ladder to prosperity. It is difficult to share Conti-Brown’s optimism that governance reform of the Fed could have addressed a problem so deeply rooted in American political economy.

This book’s merits are considerable and will command the attention of anyone seriously trying to understand the Federal Reserve. But for all of the insights it provides, in this respect the book treats the Fed as if its actions are isolated from the wider American political economy; and this does exactly what Conti-Brown argues we should not do, which is to exaggerate both the Fed’s power and its independence.