Liaquat Ahamed, author
of Lords of Finance, The Bankers Who Broke the World, discusses
the parallels between the
Great Depression and the Financial Crisis of today at The American Academy of
I concur heartily with Mr. Ahamed on the primary causes of the bubble
and collapse, especially with
regard to the enormous policy
errors of the Greenspan Fed.
But I always find it annoying that
the conscious, widespread
fraud that was promoted by Wall Street, both in 1929 and in the most recent crisis,
is rarely discussed as the major corrupting
influence that distorted both economic and monetary policy and the real economy.
I cannot speak to the
1920s, but there is little doubt in my mind that
there was a concerted effort to game and corrupt the financial system that gained a major momentum in the 1990s, and that
culminated in the financial
collapse and economic malaise and instability that is plaguing the world today.
One needs look at the
actions of Messrs. Greenspan, Rubin, and Weil, and
the political administrations during
Clinton and Bush and Obama, to begin to penetrate the veil of secrecy.
The only mania and madness
of the people was in trusting
the words of demagogues
and conmen, and their associated supporters and enablers.
And even today people
continue to mouth their
false slogans and fatal prescriptions.
The Banks must be restrained,
and the financial system reformed,
with balance restored to
the economy, before there can be
any sustained growth and recovery.