Quick action by the Federal Reserve one year ago may have helped the economy avoid a broader collapse in the wake of the failure of Lehman Brothers. The Fed "looked at this situation ... and said, 'You know, one of the things the financial markets are short on right now is the willingness to take risk.' And it said to itself, 'Well, we can take risk,' and that's what they started doing," said former Fed Vice Chairman Alan Blinder. Blinder estimates the Fed's rescue actions will cost taxpayers no more than $30 billion.

Related Summaries