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Saturday, October 11, 2008

1929 vs. 2008: Similar forces at work eight decades apart

Like everyone else, I've been very concerned about the current financial crisis. This is an excellent explanation of what is happening and why and how it happened.

Historian Douglas Astolfi points to three periods of "incredible greed" on the part of wealthy corporations in American history.

The first occurred in the 1870s during a speculative boom following the Civil War. He identifies the Roaring '20s as the second as investors leveraged stocks to secure loans from banks to buy more stocks while the stock market took off in the post-World War I period.

And the third?

We're living through it right now, said Astolfi, professor of history at St. Leo University in St. Leo, Fla.

Astolfi told Catholic News Service the latest period has been fueled by three decades of financial deregulation and a banking industry that encouraged people to buy on credit because there was plenty of money to be made off a housing bubble which no one thought would ever burst.

And here's my favorite quote:

"There's not a crisis in confidence in the market today," he said. "There's a crisis in government. The government has repeatedly screwed up."

story here

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