Most Americans probably have no idea that the leadership of the Federal Reserve is about to change as the institution that manages the flow of money in the U.S. economy enters its second century.
That is a concern for Jim Bruce, who hopes to get people — and lawmakers — talking more about the powerful central bank through his documentary premiering in Washington on Friday, Money for Nothing: Inside the Federal Reserve.
“It’s a transition period at the Fed,” said Bruce, noting that Ben Bernanke’s term as Fed chairman expires Jan. 31 and President Obama is currently mulling his replacement. “And it’s the 100th anniversary. It’s a great time for people to be thinking about and discussing what the Fed should be doing. It is greatly influenced by public opinion, so if public opinion changed the Fed might change.”
Of course, the premise of Bruce’s comment — and that of the 104-minute film he produced and directed — is that Fed policies need to change. Money for Nothing documents the history of the Fed and its response to crises ranging from the bank panic of 1907 to the financial crash of 2008. But it sends a clear message that the Fed, by always keeping the spigots open for even the riskiest financial ventures, has created a boom-and-bust cycle that can’t seem to be broken.
Just take a look at the past decade, Bruce said in an interview this week. “The first time I noticed what the Fed was doing was after 9/11, when they started lowering interest rates aggressively, and kept doing it,” he said. “I was in California and the housing bubble there was exploding all around me. I had a sense they were out of step with what was happening.”
After the 2001 terrorist attacks, the Fed did all it could to keep consumers spending while ignoring signs that many people were over-mortgaging, Bruce argued. The result was a strong economy for a few years in the mid-2000s, followed by the biggest financial collapse since the Great Depression.
“If you take credit for the boom from ‘03 to ‘06, you have to take credit for what happened afterward as well,” Bruce said.
Now Bruce worries that the U.S. economy could be on the same path, headed for another bust even amid signs of a steady rebound. “We’re about to see the downside of the boom we just had,” he said.
Bruce, 38, grew up in New Jersey, studied film at Middlebury College in Vermont, and spent a year as a professional hockey player in Europe. When he returned in 1997 he went to California and broke into the industry as an editor, working on several films before becoming editor, writer and coproducer of an award-winning documentary, Sierra Leone’s Refugee All Stars, in 2005.
Money for Nothing is Bruce’s first film as director. He said his goal was to empower people by helping them better understand an institution shrouded in mystery.
“The Fed is supposed to involve us,” he said. “The American people should be thinking about what this agency does. I hope the film will create some debate.”
With that in mind, Bruce ended the documentary with a provocative statement, as narrated by actor Liev Schreiber:
“More than ever in its 100-year history, the Federal Reserve holds the future of our economic system in its hands. Can the Fed help foster an economy that’s built to last, one not based on stock or housing bubbles, but on sensible productive investments that will enrich not just some of us, but all? Or will it continue to offer the empty promise of money for nothing?”
Money for Nothing opens Friday for a week-long run at the Landmark E Street Cinema, 555 11th Street NW in Washington, and opens in New York the same day. It will play in Los Angeles starting Sept. 20.
What We're Following See More »
"Even if House Republicans manage to get enough members of their party on board with the latest version of their health care bill, they will face another battle in the Senate: whether the bill complies with the chamber’s arcane ... Byrd rule, which stipulates all provisions in a reconciliation bill must affect federal spending and revenues in a way that is not merely incidental." Democrats should have the advantage in that fight, "unless the Senate pulls another 'nuclear option.'”
The House has passed a one-week spending bill that will avert a government shutdown which was set to begin at midnight. Lawmakers now have an extra week to come to a longer agreement which is expected to fund the government through the end of the fiscal year in September. The legislation now goes to the Senate, where it is expected to pass before President Trump signs it.
Alexander Acosta was confirmed Thursday night as Labor secretary, officially filling out President Trump's cabinet on day 98 of his presidency. Nine Democrats joined every present Republican in voting to approve Acosta, with the final tally at 60-38. Trump's first choice for Labor secretary, Andrew Puzder, withdrew his nomination after taking criticism for hiring undocumented workers and for other matters in his personal life.
"Rep. Will Hurd (R-TX) plans to introduce legislation today designed to help federal agencies update their aging technology—and this time, it has White House backing. Hurd worked alongside White House Office of American Innovation officials Reed Cordish and Chris Liddell in crafting and tweaking the legislation, and called their partnership an 'invaluable' part of the process."