Repeating economic history
“History repeats itself, first as tragedy, second as farce,” said Karl Marx. “It is not worthwhile to try to keep history from repeating itself, for man’s character will always make the preventing of the repetitions impossible,” wrote Mark Twain. “History repeats itself because no one was listening the first time,” is a keen quote that is not attributed to anyone in particular. “Those who cannot remember the past are condemned to repeat it,” wrote George Santayana who also wrote, “Those who cannot learn from history are doomed to repeat it.”
Just before Black Tuesday in 1929, the top bankers gathered to bail themselves, their customers and the economy out, but it failed and the stock market crashed, losing 83 percent of its value as unemployment rose to 25 percent. The NY Post contrasted that era with our current era and found that Marx, Twain and Santayana might be right and that while different approaches were taken, the current system of bankers and politicians have aimed us in the same direction. The parallels revealed are uncanny:
“Then: Charles Mitchell, head of National City Bank (which ultimately morphed into Citigroup) was a Class A New York Fed director before and after the 1929 crash, with an inside seat to ensure the flow of cheap money to the biggest banks, while smaller ones crumbled.”
“Now: Jamie Dimon, head of JPMorgan Chase, is a Class A New York Fed director before and after the 2008 crisis, with an inside seat to ensure the flow of cheap money to the biggest banks, while smaller ones keep going bust.”
“Then: The Glass-Steagall Act passed in 1933 to break up banks into commercial (customer-oriented) and investment (securities creation and trading) arms to keep banks from speculating with the public’s deposits and bringing down the economy.”
“Now: The Dodd-Frank Act passed in 2010. It did not break the banks, (the biggest of which are bigger now than they were before the 2008 crisis) or their ability to do things like ding customers for stupid fees to make up for bad bets elsewhere in their institution.
Check out the NY Post for more parallels.