A Secret Meeting And The Birth Of The Federal Reserve | Planet Money | NPR

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

In 1906, an earthquake in San Francisco started a chain of events that by 1907 had destroyed the US economy. Unemployment was up. The stock market was down. People started panicking. They were lining up overnight to pull their money out of healthy banks. This can be deadly for an economy: Healthy banks have to shut down, businesses can't get credit, they lay people off, and the economy gets worse.

At the time, the U.S. government had no way to deal with the panic. There was no institution that could step in to stop the run on healthy banks. So the job of stopping the panic fell to one man: J.P. Morgan (of JPMorgan fame).

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