If there are lessons from 1873, they are different from those of 1929. Most important, when banks fall on Wall Street, they stop all the traffic on Main Street — for a very long time. The protracted reconstruction of banks in the United States and Europe created widespread unemployment. Unions (previously illegal in much of the world) flourished but were then destroyed by corporate institutions that learned to operate on the edge of the law. In Europe, politicians found their scapegoats in Jews, on the fringes of the economy. (Americans, on the other hand, mostly blamed themselves; many began to embrace what would later be called fundamentalist religion.)Nelson maintains that the circumstances parallel another, earlier crash than the Great Depression of the 1930s that was so vivid in the memories of my parents' generation. Read the whole piece here.
Thursday, October 2, 2008
The Panic of Aught-Eight
A historian named Scott Reynolds Nelson writes a fascinating piece on the current economic upheavals in The Chronicle of Higher Education: