Financial Problems...History DOES Repeat Itself!

In US II as we go over the Populist era and the plight of the farmers and the demise of the agrarian society, we see some eerily similar situations to today's financial crisis. A couple of students commented about the loans given to farmers in the post-Civil War era and how the ill-suited risks taken by many banks ended up as bankrupty for so many farmers being so much like all the foreclosures of today and the domino effect that has been seen from all of that. It is a good lesson to learn. Whether one agrees with more government regulation or less government regulation, surely we can all agree that circumstances can not be allowed to reach the dire straits that we now see. How many families have been seriously injured by all of this? And how many of the CEOs of many of these financial insitutions have felt similar pain? That is one of the greatest arguments against the bailouts, that often the CEOs do not get hurt, even though they allowed the horrible conditions to develop. We need to ask also "What role does government have?" Do we want smaller government or larger government? If we want smaller govt, can we feel secure in having the financial world regulate itself, or is that a case of having the fox guard the henhouse?

Today's finicial crisis also raises the question about being in a recession. A recession is defined as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales." (Wikipedia) So what does that mean? It means we have what we have right now. I am not able to understand why this administration refuses to answer 'yes, we are in a recession' (okay, I do understand why this administration refuses). So we have problems in the areas underlined in the definition above. That is obvious. It has not lasted long enough nor had the devastating impact that would make it a depression ("a sustained downturn in the economy. It is more severe than a recession (which is seen as a normal downturn in the business cycle). Considered a rare but extreme form of recession, a depression is characterized by unusual increases in unemployment, restriction of credit, shrinking output and investment, price deflation or hyperinflation, numerous bankruptcies, reduced amounts of trade and commerce, as well as violent currency devaluations." - Wikipedia), but it sure feels ugly. And while the actual numbers and names may be different, the general issues remain the same as during the Gilded Age. You'd think we'd learn, eh?