There are a number of good books out about The Great Debacle. To get a sense of history, try 13 Bankers — The Wall Street Takeover and the Next Financial Meltdown, by Simon Johnson and James Kwak (Pantheon/Random House, 2010). Gee, it’s good and it gives an historical perspective about the our 2008 bubble. In its pages, you’ll see how government has tried time and again to “protect society, at large from the economic and political power of big banks.” How about the panic of 1907? How about Republican Theodore Roosevelt busting trusts? And the book quotes Arthur Schlesinger about FDR’s first months in power: “No business group was more proud and powerful than the bankers; none was more persuaded of its own rectitude; none more accustomed to respectful consultation by government officials.”
And it made me think of this about Clinton and Congress in 1998 and the repeal of Glass-Steagall. Do you think everyone in government woke one morning and said among themselves: “Let’s repeal Glass-Steagall?” I doubt it. Or do you think that the investment bankers and commercial bankers lobbied them like mad?
It’s true — we repeat our sins over and over again.