Part 5/16:
Arthur Burns, then Chairman of the Federal Reserve, expressed a desire to inject new money directly into the distressed corporations but was constrained by law. Instead, he and other Fed officials took surrogate measures—calling the heads of major banks and encouraging them to lend freely, effectively creating money out of thin air to be funneled into failing companies like Penn Central. Griffin emphasizes that this process was a clear demonstration of the Federal Reserve's role not as a protector of the public but as a "lender of last resort" that perpetuates the existence of insolvent institutions to serve its own ends.