THE ALCHEMISTS

Holding that monetary policy is too subtle and complex to entrust to politicians beholden to the whims of an uninformed electorate, Washington Post financial columnist Irwin convincingly argues that independent central banks are an essential element of responsible economic stewardship.

The author rises to the defense of those who control the money supply, delivering a paean to central banking and the almost mystical power it wields over the economy. His characterization of Ben Bernanke, Jean-Claude Trichet and Mervyn King, leaders of the Fed, the ECB and the Bank of England, respectively, as almost demigods is perhaps a bit hyperbolic; he claims that their actions in 2007 and 2008 “would create the world to come.” Unexpected wit and an eye for drama keep the meticulously researched minutiae of monetary policy from reading too much like a baseball box score, but readers without a background in economics or finance may find all of the jargon bewildering. Irwin is effusive in his praise for the overall performance of the central banks. He singles out Bernanke specifically for his measured response and political savvy, while King, who “seemed to disdain bankers personally, and was privately contemptuous of their views,” receives mixed marks for his failure to play well with others. The close personal relationships of the three, forged over countless hours communing in exclusive clubs and at the sidelines of global conferences, are contrasted favorably with the messy backbiting and rabble-rousing of the political process. Enlightening chapters about the winding history of central banking and the People’s Bank of China have less to do with the main narrative but add depth to the book as a whole, making it an indispensable resource for anyone seeking to understand the role played by the guardians of the economy.

The most complete and authoritative account to date of the response of the central bankers to the global financial crisis.