Jim Bruce offers a brief history of the Federal Reserve System, as well as a critical but fair-minded view of the flaws of its policies, particularly with regard to the economic collapse of 2008, in his documentary “Money for Nothing: Inside the Federal Reserve.” The sober, technically conventional piece doesn’t really offer any coherent suggestions for improving things even as it bemoans the fact that nothing has really changed in response to the Great Recession. But perhaps it’s too much to ask for plausible solutions as well as its cogent analysis of what went wrong.
The film does a good job of laying out the creation of the Fed in the early twentieth century as a response to the frequent financial panics that had been part of nineteenth-century American history. And it explains admirably how it was set up as a sort of decentralized version of a central bank in response to worries that a centralized system fashioned after European models would represent Washington overreach. Archival materials and graphs help flesh out Live Schreiber’s narration on these points.
Bruce’s main thrust, however, is on Fed policy, which his script and his many interviewees—including historians but also past Fed chairman Paul Volcker, past members of the Governing Board and and past heads of the system’s twelve regional banks—contend has become overly politicized despite the supposed wall that separates it from electoral concerns. Though the problem is traced back to the 1950s and 1960s, the focus is on Alan Greenspan, who held the chairmanship from 1987 to 2006. Though he was an avowed disciple of the libertarian ideas of Ayn Rand, it’s argued, Greenspan manipulated monetary policy in ways that helped promote the financial bubble that ultimately burst in 2008. For a time he was treated as a “rock star” because his tactics seemed to work magnificently, but after the fall, he became pretty much a pariah. (Bruce inserts footage of Babe Ruth striking out after so many homers as an analogy.) And his successor Ben Bernanke, who served under Greenspan, was prone to subscribe to the same misguided ideas when in subsidiary roles and continues to promote policies that might serve as short-term fixes but may ultimately do more harm than good.
Bruce tries to liven up what could be a deadly dull exposition (including the inevitable effort to describe what derivatives are in terms an educated layman might understand) with clips from movies—Buster Keaton slapstick chases and “It’s a Wonderful Life,” with James Stewart as the beleaguered George Bailey, among others—and from TV (“The Daily Show”) as counterpoint to the serious stuff. And there’s plenty of news footage, as well as shots of wooden blocks being stacked atop one another until the whole thing is about to collapse—a fairly obvious metaphor.
Overall “Money for Nothing” does a reasonably good job of covering its subject in a balanced fashion, without turning into a screed. But inevitably it’s a rather superficial introduction rather than a thorough investigation, and while its sobriety is more welcome than a one-sided assault would be, the fact that it resembles a decent academic lecture on the subject means that it’s interesting, but hardly scintillating.
The introductory man-on-the-street clips do prove, however, that education about what the Fed is and how it operates is sorely needed, and if people would watch Bruce’s film, it would be a beneficial thing for public discourse. The likelihood of many of them doing so, of course, is slim.