Economy

What The Fed Was Designed To Do

by Bronson Arcuri

Robert Smith playing the part of JP Morgan calls in the prominent bankers of the day to help solve the financial panic of 1907.
Robert Smith playing the part of JP Morgan calls in the prominent bankers of the day to help solve the financial panic of 1907. Mito Habe-Evans / NPR

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COVID-19 isn't the first natural disaster to shake the world economy, but today we're more prepared for one than ever.

In 1906, an earthquake in San Francisco started a chain of events that destroyed the U.S. economy by 1907. It also led to the creation of the country's most powerful economic tool: the Federal Reserve.

Listen to the original Planet Money podcast episode here! Subscribe to our video series here — and while you're at it, subscribe to our podcast.

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