Lessons from a History of the Federal Reserve: A First Look

Tomorrow evening we will hear Alan Greenspan talk about some parts of his role as the nation's and the world's leading central banker. Anticipating that event, I thought I would talk tonight about the organization he heads, some of the things they have done, and some of the people who led it.

We all know the Federal Reserve as one of the most prestigious institutions in Washington, a pillar of strength and a symbol of stability. The Federal Reserve Chairman is often described as the second most important government official, surely outranking the Vice President in prestige if not in protocol. No one cares where the Secretary of State sits when the President gives the State of the Union address, but when the Chairman of the Federal Reserve sat next to the President's wife, there was much speculation about the apparent meaning.