Money Man - On Sept. 11, as Economy Teetered, Unsung Banker Kept It From Crashing

ABCNEWS.com ^ | Sept. 4 2002 | Betsy Stark

[meyer]

What a ridiculous assertion that this man is responsible for "saving" our economy. The first dozen or so responses just proves that many modern day conservatives believe in the power of government just as much as liberals do. The only thing accomplished by printing more money is to devalue what's already out there. Face it you devoted acolytes of the Grand Pubah Greenspan, the Fed is unconstitutional, corrupt, and in the end, powerless to save anything.

I don't necessarily disagree with you in principal, but the federal reserve's function is to regulate cash flow to the bank. It acts as a reserve. I doubt if they printed that much money in 2 or 3 days. They pulled it out of reserves with the primary intent of handling any runs on the bank that might have occured. As luck would have it, people didn't make massive withdrawels (though I'm sure that there was a bit more cash pulled out of the bank over the next couple of days). If there had been a cash shortage at even a few banks, things might have been different. People panic at such times.

Also, $45 billion or $90 billion, in the grand scheme of things, really isn't that big of a deal in our economy. Its significant, but it isn't huge.

[GovernmentShrinker]

Also, $45 billion or $90 billion, in the grand scheme of things, really isn't that big of a deal in our economy. Its significant, but it isn't huge.

About $320 per person, to put it in clearer perspective. Not a big deal at all.

[GovernmentShrinker]

Unfortunately, many of the hard-core anti-Fed wackos are also anti-black wackos. It might really send them over the edge if this guy ever became Chairman of the Fed. It would sort of unify their main conspiracy theories. He sounds like he wouldn't be a bad successor to Greenspan, but I hope they'll get him some extra-excellent Secret Service protection if he ever takes the helm.

[Sangamon Kid]

Also, $45 billion or $90 billion, in the grand scheme of things, really isn't that big of a deal in our economy. Its significant, but it isn't huge.

And somehow you think the faucets were turned off once that amount was "created" out of thin air. Check the charts and tables here for M3 and tell me if they stopped the faucets, at any time! How else can we account for continued inflation at 3 to 3.5% every year. The Fed'd policy is a policy of death by a thousand papercuts. Press Me

[Sangamon Kid]

Unfortunately, many of the hard-core anti-Fed wackos are also anti-black wackos. It might really send them over the edge if this guy ever became Chairman of the Fed. It would sort of unify their main conspiracy theories. He sounds like he wouldn't be a bad successor to Greenspan, but I hope they'll get him some extra-excellent Secret Service protection if he ever takes the helm.

The Fed uses a cookie-cutter when they crank these guys out. In the end, what difference does it make to anybody what color he is if all he does is toe the statist line..."Run along sonny, Uncle Sam knows what's best for you."

I wouldn't care if this particular Greenspan disciple, George Bush, or my Aunt Dee was in charge of the Fed. The fact that someone can be deluded enough to think that he/she can exercise some kind of mastery over the financial lives of billions ought to tell us about the kind of power and glory hungry people we're dealing with in the Fed.

[ArcLight]

Maybe I should be more paranoid, but I really don't think there are a lot of non-black Americans these days who'd give a rip about having a black guy running the Fed. Long as he doesn't wreck the economy, nobody'll care. Which is as it should be.

[cpdiii]

I've heard of him, but I didn't know he was that important. I TOLD you us black folks are taking over! :-)

As long as Walter Williams, Condi Rice, and the Black Avenger are part of the new elite I can work with it. :-)

[Utopia]

I really don't think there are a lot of non-black Americans these days who'd give a rip about having a black guy running the Fed. Long as he doesn't wreck the economy, nobody'll care. Which is as it should be.

So why make an issue out of his skin color?

[ArcLight]

Ethnic pride. Same reason Irish pols like to march down the street on St. Patrick's Day.

[Movemout]

One might see a pipeline that has an unnecessary valve inserted. The necesity of the valve might be debated but its existence is unquestionable. The Poohbahs opened the valve for liquidity and the consequences may be felt later but failure of the pipeline on the day in question was not an acceptable option. Ferguson played his role correctly.

[Utopia]

Ethnic pride. Same reason Irish pols like to march down the street on St. Patrick's Day

I'm just proud that he's an American.

[Sangamon Kid]

I understand what you're saying, but why is it that the only picture I see in my head is a scene typical of Three Stooges plumbing practices; the end result being a spaghetti-like Rube Goldberg-esque maze of piping and valves that not only doesn't work, but places at risk the life, limb, and property of the customer?

[Poohbah]

The Poohbahs opened the valve for liquidity and the consequences may be felt later but failure of the pipeline on the day in question was not an acceptable option.

Ahem. For the record:

• I didn't open the valve.
• I didn't leave the fridge open.
• I didn't leave the toilet seat up.
• I didn't let the dogs out (woof, woof, woof-woof).
• And, finally, I did NOT shoot the sherriff.

Thank you. We now return you to our regularly scheduled Freeping.

[Movemout]

I remember that episode. I don't disagree with your assessment of the system. It riles me, as well.

[Moonman62]

Does this mean that the billions and billions of dollars entered the economy permanently? If so, this means that money supply has increased about $225 billion between 9/11 and Y2K (they pumped in about 75 billion then too).

Good question. I believe most if not all the liquidity was in the form of repurchase agreements and currency swaps, which are both temporary.