An Annual Report for the Federal Reserve Bank of
Dallas contained the following observation: “For
the most part, we take the financial system’s routine
workings for granted—until the machinery
blows a gasket. Then we scramble to fix it, so the
economy can return to the fast lane.” Why might
most people, including most policymakers, tend
to take the workings of the financial system for
granted? Why can’t the economy run in the “fast
lane” if the financial system has “blown a gasket”?