kane

I saw a really good interview with a woman that is a law professor at Harvard. Her specialty is bankruptcy law. She basically said that the first financial crisis this country faced came under George Washington. Banks went bust, unemployment skyrocketed and the economy tanked. Eventually the market worked itself out. We followed that boom and bust roller coasted up until the 1920's. We are not talking about recession. We are talking about major boom times followed by major busts. The 1920's saw one of the biggest booms in history and was followed by the biggest bust that lead into the depression.

As we came out of the depression there were some regulations put in place to help ward that off. They gave the SEC (created in 1929) more powers to closer watch the markets and created the FDIC. Before the FDIC if you had money in a bank that failed, most likely you lost your money. So knowing that caused runs on banks to happen anytime there was a panic. The FDIC helped stop that. This regulation sent the country on about 65 years of prosperity. We had some recessions and we had some smaller boom times, but for the most part we have seen steady growth since then, no more boom and bust. We saw the recent troubles because we have loosened up some regulation and we have created a bunch of new financial markets and products that have no oversight

What I am getting as is that she said a truly free market that is left to its own devices and the whims of the investors in it will boom and bust by nature and the person that ends up fucked in the middle class guy. So I'm curious if not regulation what would help make the economy stronger and more stable?