Lending programs are most effective as backstops when loans are offered at a penalty rate and are of short duration. When appropriately calibrated, lending programs can help promote market functioning but limit the Federal Reserve's overall footprint in financial markets in the longer term.
For reasons that I shall elucidate shortly, one critical element in creating those opportunities is to provide rigorous education and ongoing training to all members of our society. This proposal is not novel; it is, in fact, the strategy that we have followed successfully for most of the past century and a strategy that we now should embrace with renewed commitment.