To mark the 80th Anniversary of the Great Crash of ‘29, we asked 15 progressive thinkers to write about lessons learned and what lies ahead. Together, their reflections constitute a New Agenda for America — a message of how the ideals of a fair society should apply to the economic and social policies of our time.
Even in the middle (hopelly the end-game) of our own financial crisis, we should consider where we could have been and where we are going. We could have easily been headed – by this time inexorably – toward a 1930’s style depression: but over the ensuing 80 years, scholars and policy makers actually learned — a phenomenon that is depressingly rare. In particular, Ben Bernanke, a scholar of the Depression, learned how to act, and then had the courage to act. There will be endless post mortems as we come out of the hills with the battle over. But Bernanke acted.
Without taking anything away from this, it is always easier to take hard decisions in a crisis. As the crisis ebbs, all of the special interests, the organizational turf, and the natural aversions to risk quickly rise up again. Actions become harder and harder, and slower and slower. That is happening today. We have not made fundamental decisions about the structure of our finance sector, about financial regulation, or about broader questions involving the shape and nature of the U.S. economy in the post-crisis world. The driver of the next crisis could easily be the U.S. deficit and debt position. This issue will move to center stage over the coming decade, but unless we begin very soon to set a different course than the one we are on, we will be increasingly unhappy with the U.S. economy we have to live in then.
Roosevelt Institute Braintruster Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team.