TODAY: 80-Year Anniversary Of Great Stock Market Crash

[Michelle Jahn]

TODAY: 80-Year Anniversary Of Great Stock Market Crash

[Michelle Jahn]

A New Agenda for America"- On the 80th Anniversary of Great Crash, What Have We Learned and What Lies Ahead?

80 years ago today, on October 29th, 1929, Wall Street saw the worst day in its history. The shock of "Black Tuesday" came to an end, but the misery of the Great Depression was just beginning.

Lynn Parramore, Editor of New Deal 2.0 , the Roosevelt Institute's economy blog, asks some provocative thinkers - lawyers, economists, historian, civil rights leaders, authors, financiers and public figures-- to talk about what the past can teach us and what our focus for the future should be.

250 words. 15 voices. And a new Agenda for America.

[Michelle Jahn]

Is it Good for the Children?

By Bill Black

Our economy is addicted to waste. It wastes human beings. It leaves them unemployed and often impoverished - and it leaves their children in poverty. Of all the things we have come to accept in America, childhood poverty is the most appalling. We can end most childhood poverty whenever we decide that we are no longer willing to accept it. Poverty used to be common among elderly Americans. Social Security largely ended that disgrace.

[Michelle Jahn]

We need to take care of parents and grandparents in order to help them take care of children. We must reach out to explain to as many mothers as possible why prenatal care and healthy pregnancies lead to healthy kids, and we must provide that care. We need a foster care system funded well enough to make scandals rare. and we need an adoption system that works for as many kids as possible.

Ultimately, we can't protect kids unless we protect their parents. That brings us back to where we started -- ending the waste of leaving people that want to work unemployed. The government needs to serve as the employer of last resort and the educator of first resort. Kids left in poverty do not get the education they need. Middle class children and their parents must choose between graduating with crushing debts or giving up their educational dreams. The GI Bill transformed America, making college a realistic for millions of veterans. We need a Student Bill for all our children.


Roosevelt Institute Braintruster William K. Black is an Associate Professor of Economics and Law at the University of Missouri-Kansas City. He is a white-collar criminologist and was a senior financial regulator. He is the author of The Best Way to Rob a Bank is to Own One.

[Michelle Jahn]

The Great Lesson

By Elizabeth Warren

Historians generally focus on the October 29, 1929 stock market crash as the triggering event for the Great Depression. But the story has a longer arc.

From 1792 through the Great Depression, booms and busts followed each other like day follows night. But President Roosevelt and the New Dealers had an innovative idea: regulation might tame the boom-and-bust cycle. So they created a new Securities and Exchange Commission to bring some discipline to the financial markets, established the Federal Deposit Insurance Corporation to make it safe to put money in banks, and passed the Glass-Steagall Act to separate ordinary banking from high-risk financial speculation.

America was protected from another financial crisis for almost 50 years. But in the late 1970s, we began to pull the threads from our regulatory fabric, overturning laws and cutting enforcement. The results were the S&L crisis, Long Term Capital Management, Enron, and now, the subprime mortgage meltdown.

There are signs that we may have learned our lesson. Last week, the House Financial Services Committee voted for a new Consumer Financial Protection Agency that would consolidate scattered and ineffective consumer credit regulations and establish a home in Washington for policymakers dedicated to rebuilding the middle class. Other reforms are also starting to move.

The banking lobby is as powerful and deeply entrenched as ever, but it was powerful in the 1930s, too. Nonetheless, the New Dealers learned the Great Lesson: Powerful insiders cannot be permitted to write the rules, and prosperity and security depend on a playing field that supports a vibrant middle class. Today, we face a similar set of questions as we faced then. Will the institutions that created the crisis continue calling the shots and writing the rules, or will Washington take the side of families? Have we learned the Great Lesson?

Elizabeth Warren is chair of the Congressional Oversight Panel created to oversee the banking bailouts and first proposed a new federal agency for consumer financial products in 2007.


Will the Day that Lehman Died Mark the Movement to a New Paradigm?

[Michelle Jahn]

Will the Day that Lehman Died Mark the Movement to a New Paradigm?

By Rob Johnson

Today marks the 80th anniversary of an epochal day in this country's history -- the beginning of what became the Great Depression. The widespread misery that followed changed our ways of conceiving of the economy and how a good society should operate. While there have been other dark days on U.S financial markets, these have not resulted in an overhaul of the way the economy runs. But September 15th, 2008 -- the day that Lehman folded -- may turn out to mark the movement toward an alternative paradigm.

There are several important differences between the economies of the 1920s and 1930s and today's economy. In 1930, the government share of GDP was a sixth of what it is now and the manufacturing sector accounted for a larger proportion of the national output. Because of this, government intervention could have immediate and drastic impacts both on the ground and psychologically (witness Roosevelt's fireside chats). In those days, the United States was positioned to be the ascendant superpower, running a trade surplus in most months of the troubled 1930s. The U.K was the power in decline, an empire which ran continual trade deficits.

It is too early to say whether the current crisis will have the same impact on our ways that the '29 Crash did. But clearly, several lessons of that traumatic period will need to be relearned. We must once again understand that financial markets need regulation, accept the necessity of government intervention, and move beyond the outmoded thinking that exacerbated a global downturn. Hopefully, our political leaders can learn from history and move beyond market fundamentalism to meet the challenge now and in the future.

[Michelle Jahn]

Where We Could Have Been - and Where We Might Be Headed

By Bo Cutter

Even in the middle (hopefully the end-game) of our own financial crisis, we should consider where we could have been and where we are going. We could have easily been headed - by this time inexorably - toward a 1930's style depression: but over the ensuing 80 years, scholars and policy makers actually learned -- a phenomenon that is depressingly rare. In particular, Ben Bernanke, a scholar of the Depression, learned how to act, and then had the courage to act. There will be endless post mortems as we come out of the hills with the battle over. But Bernanke acted.

Without taking anything away from this, it is always easier to take hard decisions in a crisis. As the crisis ebbs, all of the special interests, the organizational turf, and the natural aversions to risk quickly rise up again. Actions become harder and harder, and slower and slower. That is happening today. We have not made fundamental decisions about the structure of our finance sector, about financial regulation, or about broader questions involving the shape and nature of the U.S. economy in the post-crisis world. The driver of the next crisis could easily be the U.S. deficit and debt position. This issue will move to center stage over the coming decade, but unless we begin very soon to set a different course than the one we are on, we will be increasingly unhappy with the U.S. economy we have to live in then.

Roosevelt Institute Braintruster Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama's Office of Management and Budget (OMB) transition team.



Read more at: http://www.huffingtonpost.com/2009/10/29/post_270_n_338107.html