Each financial “crisis” is its own unique story. While the characters in the story may learn from the experience, the broader lesson doesn’t seem to be learned.
When times are good, momentum carries the day. Mistakes are made, but they are easily disguised or disregarded. Once the problems are clear, at first they are ignored or denied. Next comes the overreaction, by the market, regulators and lawmakers.
It’s easy now to look back at the Savings and Loan crisis of the 1980's and 90's to see what went wrong, but it took time to gain that perspective. I suspect we’re somewhere in the midst of the current financial crisis; but I think after the final chapter is written, we’ll feel like we’ve read this story before.
Comments
This is like standing too close to an impressionist painting and describing what one sees. It can easily be done but what's the point (no pub intended)? Far more useful would be to interview knowledgable people on the economic and regulatory policies that have led to this and the numerous other financial crises since the early 1970s. Allow me to suggest James K. Galbraith at U. of Texas.