New Deal financial reformers were fortunate that the crash had followed the satisfying script of a morality play, with sin and repentance followed by redemption. The wicked ways of Wall Street in the ’20s could be comfortably told in a fireside chat. Franklin Roosevelt had a bunch of rich rascals to chastise — unscrupulous individuals rather than irresponsible institutions, as in our own recent decline. The blatant stock market abuses were comprehensible to ordinary citizens, quite unlike the exotic credit derivatives and mortgage-backed securities that baffle us today. And the Great Depression that followed the 1929 crash fostered a climate for reform that has proven hard to replicate.
However severe, our current predicament seems mild compared to the calamitous unemployment of the early 1930s. Hence, average Americans, mystified by the complexities of finance today, still await a new season of financial reform.
Sunday, August 8, 2010
money quote of the week
From "Everyman's Financial Meltdown" By Ron Chernow, 22 October 2009 NYTimes Op-Ed: