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Lessons of Great Depression Apply to Current Meltdown

The stock market crash of 1929 offers parallels to the spiraling financial crisis of the 21st century, giving insight to measures that can help correct the collapse. Paul Solman talks to two authors on the Great Depression who assess the government's role and analyze policy choices.

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    So Roosevelt takes over, and what does he do? And how does he sort of get the country back on the upswing?

  • AMITY SHLAES, Bloomberg:

    When he comes in, he does a lot of good things. One is to establish deposit insurance. We talk about that today. Another is to sort out the banks with the bank holiday. We see people doing that now.

    Very quickly, he did it, and it was a rather bipartisan affair. The men said you couldn't tell which party the people were except for you knew what side of the Treasury desk they were sitting on when they sorted out the banks.

    So, began to create the SEC, the Securities and Exchange Commission, that gave clarity to markets. And, finally, of course, Roosevelt reassured through the radio, "The only thing we have to fear is fear itself," from the Inaugural and then subsequently, as well.