The Federal Reserve is an arsonist posing as a firefighter. During a financial crisis, the Fed arrives on the scene with a hose hooked up to its own spigot of unlimited money. The financial sector cheers on their heroes for rescuing their balance sheets from the fire and financial journalists begin drafting their hagiographies of the Fed chair for his "courage."

In Playing with Fire: Money, Banking, and the Federal Reserve, the Mises Institute dispels these myths about the Fed. The documentary shows that far from being the hero of the story, the Fed is the villain.

Despite their sophisticated economic models and platitudes about the Fed's independence, the dual mandate, and the need to "balance risks," the Fed

failed to predict major crises, even ones of their own making

functions as the US Treasury's money printer

restricts economic growth

protects banks from suffering losses associated with their own risky lending practices
drives the business cycle

Since ancient times, governments have realized that control over money and banking is essential for growing in size, scope, and power. The reason is simple: Taxes are unpopular, but inflation is subtle. Governments would stay small if every significant expansion meant risking a tax revolt. With the power to clip coins, debase the metals in coins, or simply print more paper money, the government can easily spend beyond its ability to tax and borrow. As Alex Pollock points out in the documentary, "That's what all governments want: to spend more money than they have."

But these actions come with consequences, and as our experiment with central bank–managed fiat money has shown, the consequences are disastrous.