East of Eden

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Blog Feature


How The Fed Saved The Economy After 9/11

By: Andy Sherman
September 24th, 2014

The Daily Kos has a remarkable piece by Arliss Bunny (hat tip to Bruce Shneier for spotting this) describing the actions of the Fed on 9/11. The piece was researched by going through the annual reports of all 12 Federal Reserve Banks, and led the author to the conclusion that "on 9-11 and the days which immediately followed, a relatively small number of people did some genuinely, physically heroic things in order to keep the economy from going off the rails..." When the planes hit the towers it was a busy day and all but one Washington based member of the Fed Board of Governors were elsewhere. Chairman Alan Greenspan was flying home from Switzerland at the time, and would not know what happened until his plane had returned to Zürich. It fell to the one senior person in DC, Federal Reserve Vice Chairman Roger W. Ferguson, Jr., to coordinate the Fed's response. In some ways Ferguson was the ideal choice, since he led the Fed's Y2K planning and response. That turned out to be a meticulously planned effort which did a good job of expecting the unexpected in ways that served them well.

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