Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

Steinbrück and Sarkozy may perhaps be forgiven for failing to recognize the significance of the moment, because the Fed had acted without fanfare and without seeking public legitimacy either at home or abroad. The sporadic global debate about alternatives to the dollar was the price that the Fed paid for keeping its stabilization campaign below the radar. On Capitol Hill, while controversy swirled around TARP, there was silence about the Fed’s gigantic global liquidity effort. As one senior New York Fed official remarked, it was as if a “guardian angel was watching over us.”37 If some members of Congress understood what was going on, they thought better of discussing the Fed’s actions openly. The reality of global financial policy disappeared in a “spiral of silence,” in which it suited both the Fed and its collaborators to bury the reality of massive and explicitly hierarchical interdependence.

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