by D. Cupples | Once again, economist Paul Krugman discusses history -- an important part of the context of why our economy is in such terrible shape. Yes, lack of adequate regulations in the 1920s were at the root of the Stock Market Crash of 1929 and the run on banks in the early '30s.
Yes, our nation's leaders should have learned lessons from history. Those "leaders" who don't understand history should have advisers who do. Krugman writes:
"If Ben Bernanke manages to save the financial system from collapse, he will — rightly — be praised for his heroic efforts.
"But what we should be asking is: How did we get here?
"Why does the financial system need salvation?
"Why do mild-mannered economists have to become superheroes?
"The answer, at a fundamental level, is that we’re paying the price for willful amnesia. We chose to forget what happened in the 1930s — and having refused to learn from history, we’re repeating it.
"Contrary to popular belief, the stock market crash of 1929 wasn’t the defining moment of the Great Depression. What turned an ordinary recession into a civilization-threatening slump was the wave of bank runs that swept across America in 1930 and 1931.
"This banking crisis of the 1930s showed that unregulated, unsupervised financial markets can all too easily suffer catastrophic failure.
"As the decades passed, however, that lesson was forgotten — and now we’re relearning it, the hard way." (NY Times)
The rest of the article gives a nut-shell explanation of what happened in the 1930s. Memeorandum has commentary:
American Spectator, The American Mind, The Agonist, The Glittering Eye and DownWithTyranny!.
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