"In American history, fundamental shifts in the economic orthodoxy usually did not occur until after there was a large and painful calamity.... The awful consequences from such an experience discredited the prevailing wisdom and suddenly opened the way for new thinking."
-- William Greider, "Secrets of the Temple" (1987)
Yes, I'm still reading Greider's book, and it still keeps telling me the lessons learned during the 1982-1984 recession are being used by Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner to solve the nation's current economic crisis.
Ronald Reagan was president during that time, and Paul Volcker, now a financial advisor to President Obama, was Fed chairman. Volcker had squeezed the economy so tight that interest rates as well as unemployment rates had reached double digits. The quote atop this blogspot represents Grieder's conclusion that even that stiff a punishment for the American economy was not enough to convince politicians to regulate Wall Street strongly enough to prevent another financial collapse.
That recession, by the way, was the worst then since the Great Depression, just as the Great Recession now that we are all living through has topped that harsh mid-80s downturn.
And once again experts are begging Congress to rein in Wall Street traders, to reform the national financial regulatory system, to protect consumers and Main Street business from the ravages and risks of an unfettered market, and to eliminate taxpayers as the default bailout for failed money managers.
And once again lobbyists are hissing and pissing away at any congressional resolve to prevent a "next time" from happening again.
Greider's opened door for "new thinking," in fact, is closing fast. The monied establishment that increased it's wealth so greatly during the Bush administration -- to the great expense of the poor and middle class -- will try to convince Obama's experts that Wall Street itself is smart enough to heal itself. Don't let your congressmen and women buy into that argument.
Wall Street for the sake of Main Street needs to be put on a short leash. No talent needs to be paid so much that it forgets the greater good. Capitalists in America should be required to have a conscience.