ben s bernanke : stabilizing the financial markets and the economy speech by mr ben s bernanke, chairman of the board of governors of the us federal reserve system, at the economic club of new york, new york, 15 october 2008. * * * good afternoon. i am pleased once again to share a meal and some thoughts with the economic club of new york. i will focus today on the economic and financial challenges we face and why i believe we are well positioned to move forward. the problems now evident in the markets and in the economy are large and complex, but, in my judgment, our government now has the tools it needs to confront and solve them. our strategy will continue to evolve and be refined as we adapt to new developments and the inevitable setbacks. but we will not stand down until we have achieved our goals of repairing and reforming our financial system and restoring prosperity. the crisis we face in the financial markets has many novel aspects, largely arising from the complexity and sophistication of today's financial institutions and instruments and the remarkable degree of global financial integration that allows financial shocks to be transmitted around the world at the speed of light. however, as a long - time student of banking and financial crises, i can attest that the current situation also has much in common with past experiences. as in all past crises, at the root of the problem is a loss of confidence by investors and the public in the strength of key financial institutions and markets. the crisis will end when comprehensive responses by political and financial leaders restore that trust, bringing investors back into the market and allowing the normal business of extending credit to households and firms to resume. in that regard, we are, in one respect at least, better off than those who dealt with earlier financial crises : generally, during past crises, broad - based government engagement came late, usually at a point at which most financial institutions were insolvent or nearly so. waiting too long to respond has usually led to much greater direct costs of the intervention itself and, more importantly, magnified the painful effects of financial turmoil on households and businesses. that is not the situation we face today. fortunately, the congress and the administration have acted at a time when the great majority of financial institutions, though stressed by highly volatile and difficult market conditions, remain strong and capable of fulfilling their critical function of providing new credit for our economy. this prompt and decisive action by our political leaders will allow us to restore more normal market

from college than men, a development that is likely to help insulate women from job losses in future recessions. one complication is that the future of labor supply is uncertain, and it is difficult to predict how labor force participation will evolve. factors like generational aging were already weighing on labor supply before the pandemic, and we saw millions of workers accelerate retirement during the pandemic, effectively retiring early. even the strong labor market has not yet lured many of these early retirees back, and some believe that as time passes it becomes less likely that they will return. over time, those who chose to leave the workforce early will move into a normal retirement age. we really don ’ t know if gender will be a factor here as this is the first generation to retire that had large numbers of women in the workforce, but workforce aging is an important consideration when it comes to labor supply. we also don ’ t know how the influence of inflation will affect decision making about returning to the workforce, but some may feel compelled to return to work. another consideration is caregiving demands and how those responsibilities will be shared within households. while i hope that we never see a public health emergency like the one we ’ ve just been through, i hope that if we do, we can avoid the governmental - 9decisions to intentionally disrupt foundational education and the unnecessary forced isolation of children. these policies have left a significant impact on this generation of children, on families and their decision making about many things including participation in the labor force. one ongoing labor supply issue relates to the lingering effects of covid that can interfere with the ability to work or impose additional caregiving needs for family members. by one account, nearly a fifth of adults who contracted covid reported ongoing symptoms of “ long covid, ” affecting significantly more women than men. at the same time, the number of working - age people with disabilities has increased significantly. while the number of americans reporting a disability had been rising gradually over the past decade, the increase picked up in mid - 2020, and about 2 million more people reported they had a disability in july 2022 than at the outset of the pandemic. 16 disability has been a major drag on the work force in rural areas in the past. living in rural kansas following the last recession, as i mentioned earlier, i am very familiar with the challenges that disability presents for many aspects of the community — beyond just economic conditions. disability is also a significant challenge in