It’s simple really. Inside the hallowed halls of the Federal Reserve, unelected, largely unaccountable bureaucrats decide whether the economy is running too hot or too cold, then tinker with monetary policy accordingly.

It’s a tremendous amount of power.

A generous reading of history suggests the Fed has a dubious track record of forecasting where the U.S. economy is headed. In fact, many are searching for a better way – an alternative to a broken system. None is in more earnest pursuit than Danielle DiMartino Booth, whose brand new book “Fed Up” explains why the current Federal Reserve system is due for a serious revamp.

Few are as critical or as qualified to suggest fixes.

DiMartino Booth joined Richard Fisher’s Dallas Federal Reserve shortly after the cracks in the financial system were beginning to show. The Fed spent much of 2007 vehemently denying these cracks even existed. Recall in July 2005, that when asked about an impending housing bubble bursting, one that might trigger recession, then Fed chair Ben Bernanke famously said, “I guess I don't buy your premise. It's a pretty unlikely possibility.”

During her decade or so at the Dallas Fed, DiMartino Booth recalls feeling initially “daunted” by all these “brilliant people” who could “do calculus in their sleep.”

She quickly became disillusioned by how insular the organization was. Sure, the halls were packed with Ph.D’s but many of these academics really didn’t understand the ins and outs of markets.

“Generally, if you say stock market to a Ph.D. economist it’s like saying ‘Boo!’ on Halloween. They get all freaked out,” DiMartino Booth says.

As the housing market was rolling over and Bear Stearns blew up, “it felt like a hospital,” she says. “Nobody was really worried.”

Unsurprisingly, the Fed’s cloistered monasticism has come under tremendous scrutiny and criticism. Many things need to change.

“I think the first step should be an acknowledgement of their own fallibility,” she says. “They really are espousing one view of economic thought that would make even Keynes rotate in his grave.”

What else? DiMartino Booth suggests a number practical reforms.

“We’re no longer the same nation that we were in 1913 when the Federal Reserve act was initially conceived,” she says. In other words, let’s bring the Fed into the realities of the 21st Century.

  • Reduce the Fed’s mandate to just minimizing inflation.
  • Take the labor mandate out of the equation and put it back in the hands of the private sector.
  • Reduce regional Fed offices to ten districts (from twelve currently) by adding a regional Federal Reserve office (or two) on the West Coast and absorbing Minneapolis, St. Louis and Cleveland into Chicago.
  • Give every district a permanent vote to minimize the power of votes in New York and Washington D.C.
  • The Fed should hire a more diverse staff with more financial market familiarity and experience
  • The Fed needs a better appreciation of monetary policy rules, like the Taylor Rule, which would help serve as a system of checks and balances

There’s hope.

By June of 2018, vocal Fed critic President Donald Trump will be able to nominate as many as five Federal Open Market Committee (FOMC) members, DiMartino Booth notes.

Meanwhile, accomplished former Goldman Sachs execs like Treasury Secretary Steven Mnuchin and director of the National Economic Council Gary Cohn have Trump’s ear on fixing the Fed. “They are clearly the two most powerful people when it comes to the economy and finance,” DiMartino Booth says.

The crusade to fix the Fed continues. Change is coming.