An in-depth look at how politics and economics shape the relationship between Congress and the Federal Reserve Born out of crisis a century ago, the Federal Reserve has become the most powerful macroeconomic policymaker and financial regulator in the world. The Myth of Independence marshals archival sources, interviews, and statistical analyses to trace the Fed’s transformation from a weak, secretive, and decentralized institution in 1913 to a remarkably transparent central bank a century later. Offering a unique account of Congress’s role in steering this evolution, Sarah Binder and Mark Spindel explore the Fed’s past, present, and future and challenge the myth of its independence. "Finalist for the 31st D.B. Hardeman Prize, LBJ Foundation" "Winner of the 2018 Gladys M. Kammerer Award, American Political Science Association" "Winner of the 2018 Richard F. Fenno, Jr. Prize, Legislative Studies Section of the American Political Science Association" "One of Project Syndicate’s Best Reads in 2017 (chosen by Koichi Hamada)" “Even for readers who get through the day without thinking about monetary policy, Ms. Binder and Mr. Spindel offer compelling insights. . . . [An] impressively researched and often riveting study.” ―Roger Lowenstein, Wall Street Journal “In this elegant and accessible book, Binder and Spindel shed new light on this tension between economics and politics. Their conclusion, that the Fed’s independence is at best fragile and at worst illusory, amounts to a fundamental challenge to conventional thinking about monetary policy in the United States.” ―Barry Eichengreen, University of California, Berkeley “A fascinating account of the way political forces in Congress have shaped the Federal Reserve at critical junctures in its history. Highly original and timely, this is a must-read for anyone who wants to understand the political pressures that the Fed will face in coming years.” ―Liaquat Ahamed, author of the Pulitzer Prize-winning Lords of Finance “The unique blend of historical and political analysis in The Myth of Independence makes this an important book. No matter how much you already know about the Federal Reserve, you'll learn more in these pages.” ―Alan Blinder, author of After the Music Stopped "This book examines the interrelationship between Congress and the Federal Reserve over time, analyzing the congressional politics of the Federal Reserve's founding in 1913 and its subsequent institutional development through the aftermath of the 2008 financial crisis. Binder and Spindel incorporate a wealth of systematic data into their historical narrative." --Frances E. Lee, University of Maryland "With persuasive evidence, The Myth of Independence looks at how the structure and behavior of the Fed is shaped in fundamental ways by Congress. This book is an important and interesting contribution to the study of the American political economy." --Nolan McCarty, Princeton University Sarah Binder is professor of political science at George Washington University and senior fellow at the Brookings Institution. Her books include Advice and Dissent and Stalemate . Mark Spindel has spent his entire career in investment management at such organizations as Salomon Brothers, the World Bank, and Potomac River Capital, a Washington DC–based hedge fund he started in 2007.