Money and Banks The Book Essay

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For example, the value of some gas to someone that is just trying to mow their lawn is a lot less than with someone who is trying to escape a coming hurricane.

However, a dollar-based system is better in that the value of money is much more stable and definable than with non-cash items because the value of those non-cash items (or any other "currency") is subject to a lot of disagreement and questions. $100 in U.S. dollars is worth much the same to one person as it is another. The gas example above can apply to money as well, but not nearly to the same degrees and lengths that bartering values would be, all else equal.

Also, there is clear regulation for the value of the dollar and the regional differences are going to be a lot less not counting the differences with the cost of living and access issues like terrain and paved roads.

1. Visit the website of the Board of Governors of the Federal Reserve System, at Click on "About the Fed," and answer the questions below. (You may need to refer to the FAQ and click around a bit to find all of the answers you need.)

a. Who are the current Governors of the Federal Reserve? Give a very brief biography of each. How much does each of these Governors earn?

The current governors are as follows

Ben Bernanke

Janet Yellen

Elizabeth Duke

Daniel Tarullo

Sara Bloom Raskin

Jeremy Stein

Jerome Powell

Bernanke makes $199,700 as of 2012 (as dictated by Congress) while everyone else (including Yellen, who is the vice chair) makes $179,700.

b. How many governors are there, how many are there supposed to be?

Including Bernanke, there is currently seven members and that is what they should be.

c. Have any of the current Governors ever worked in the private banking industry?

It's about half and half, really.

Bernanke was mostly in the government and educational spheres including at several colleges like Princeton and the NBER. He really does not have a history as a private banker.

Yellen, the Vice-Chair has a similar history as Bernanke as she was been in the college and government sphere for much of her career. She has been educated or worked at Brown, Harvard and Yale.

Elizabeth Duke absolutely worked in the private sphere including at SouthTrust Bank and Wachovia Bank. She has not really worked in the public sector all that much before she became a governor.

Daniel Tarullo is much like Bernanke and Yellen in that his work as been in the government and educational spheres including working for the Clinton Administration and under Edward Kennedy.

Sarah Bloom Raskin worked in the private sector including at Promontory Financial Group but she also worked for the State of Maryland, so she very much has a blend of private and public experience not including the Fed Reserve.

Jeremy Stein is also a public sector/educational guy given his work with several colleges including MIT but he's also worked as a fellow with the American Academy of Arts & Sciences, so there is a bit of a mix although there is not a lot of private work there.

Jerome Powell has a lot of government/educational work but has also served on a number of corporate boards per his profile on the Fed website, although they're not named explicitly.

d. Click on "Monetary Policy" at the top of the page. The presidents of which Federal Reserve Banks currently have votes on the Federal Open Market Committee? Is (voting) membership on the FOMC equally distributed across all twelve Federal Reserve Banks from year to year?

Right now, there are some people that have votes in the regional banks, but not that many. There is James Bullard in St. Louis, Charles Evans in Chicago, Esther Jones in KC and Eric Rosengren from Boston. Everyone else is form the larger board mentioned above. However, all of the alternates are from regions including from Dallas, Minneapolis, Cleveland, Philly and even a First VP from New York.

2. One of the most vocal and important critics of the Federal Reserve is Congressman Dr. Ron Paul, who wrote a book in 2009 titled End the Fed. The second chapter of the book is available on the website of the Ludwig von Mises Institute at According to Dr. Paul, do big banks like or dislike the Federal Reserve System and its control over the banking industry? Why do they feel this way?

Paul asserts fairly early on in the link above that they like have a "bank of last resort" to bail them out if they fall on their face, much like many of them did in 2007-2009. Chase and a few other big banks were in pretty good shape but Wachovia folded, Citi struggled and even stalwarts like Chase and Wells Fargo took government money to help get the bank industry back on track. The banks probably don't like the regulation too much, but having the safety net there obviously is to their liking.[continue]

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