History Matters: Lessons Learned from the Great Depression and Recession

Many of us are familiar with the quote by George Santayana, “Those who cannot remember the past are condemned to repeat it.” We may remember his sage advice in a different variation, since quotes, like whispers travelling through children’s’ ears, can be altered, or even restated and credited to another, but the gist has remained the same. If we choose to ignore past events and the lessons surrounding those events, then we will go down the same path of falls, bumps, and in extreme cases, catastrophic disaster. But this famous axiom is not simple to apply, as we discovered in the recent financial debacle of 2008.

One reason for the difficulty in applying the lessons of the Great Depression, in reference to recent ills, is in the fact that we did not adhere to history’s truths as a preventative measure in the first place, but waited until dire circumstances forced us to try and make sense of a big mess that threatened to undo our entire economy.

The Great Recession, as it is now referred to, was followed up by a response from those who adhere to the belief that repeating the error of  bank failures, like what happened following the Crash of 1929, would bring about the collapse of the economy.

The Obama administration was forced to find a solution and quick. The  focused  aim, and some believe successful outcome, on saving the financial sector, was in large part because of the belief that it was one of the prime errors that exacerbated the Great Depression.

I am not an economist, and do not pretend to understand the complexities of economic policy in the past or present, and I am especially unsure of how things will affect the generations to come, but I do have, as an ordinary citizen, a deep concern about one particular aspect of how things played out.

My concern, is not so much that we bailed out large banks, perhaps it was a situation of too big to fail, but why wasn’t there any holding of accountability? The big time players skipped off scot-free with exorbitant sums of taxpayer’s money falling out of their well stuffed and overflowing pockets.

There should have been moral strings attached to the bailing out and regulations put into place to protect the ordinary citizen in the future. Measures should have been taken to prevent the unethical risks financial institutions took with other people’s money from happening again; being required by law to have more capital in place to back up risky loans for one.

I hope that we will learn a lesson from the Great Recession, of the need to hold the keepers of our money accountable. There is still time to make changes, to hold banks accountable, though the most opportune moment, upon their receiving a Federal bailout, has passed.