As we are oft encouraged to remember the lessons of History so as not
to repeat them. let us not think that all of the lessons are negative.
Although I suspect that neither Gibbons, nor Toynbee ever said, "Been
there, done that.", in that exact form, they would perhaps have
enjoined us to take solace from History when it is available.
History need not always be our scourge. It can shed the happy light
of Perspective onto our poor lives and, although it is not charged to
'ravel up the tattered sleeve of care', it can provide the peaceful
precondition to enter into that good night's sleep.
It was in that spirit that I began mucking about on Mount Googoltha in
search of The Good News and that is -
Been There, Done That.
What lies below is an edited version of my findings, coming mostly
from a recent article in The Wall Street Journal, which organ of the
Fourth Estate (albeit some may suggest that this particular bleeds
over into the proper purview of The Fifth) I find to be the
healthiest and most Fair and Balanced, to coin a phrase.
The Panic of 1792 - The federal government assumed obligations that
such states as Massachusetts and South Carolina owed from the
The Panic of 1819 - States passed laws delaying foreclosures on real
estate and personal property.
The Panic of 1841 - Another bout of financial volatility sent land
values plummeting. States that had been depending on land taxes
suddenly found themselves short of cash; nine of them defaulted on
The Panic of 1907 - The Treasury injected millions of dollars into the
banking system. But it was really J. Pierpont Morgan, the banking
magnate and undisputed king of New York financial markets, who saved
The Great Depression - President Franklin Delano Roosevelt and
Congress created the Home Owners' Loan Corp., an ambitious government
agency designed to prevent foreclosures on an enormous scale.
The agency bought defaulted mortgages from banks, then refinanced them
at lower rates for fixed, 15-year terms. Over the three years it
accepted applications, the agency was swamped with 1.9 million
requests; about half of the applicants had monthly incomes of between
$50 and $150.
Ultimately, the agency issued mortgages, averaging $3,039 apiece, to
some one million homeowners. About one in 10 Americans with nonfarm,
owner-occupied dwellings secured aid from the agency, according to a
1951 paper by C. Lowell Harriss of Columbia University.
The current mortgage crisis involves securities backed by subprime
home loans. But during the 1930s, there was no secondary market for
securitized mortgages. So the agency had to hold the mortgages for the
full terms. It finally closed up shop in 1951, with about 80% of
borrowers having paid their loans off on time or early.
The agency earned the government a small profit.
Savings and Loan Crisis - From 1986 through 1995, about half of the
3,234 S&Ls in the U.S. closed, leaving federal insurers stuck with
tens of billions of dollars in bad loans. In 1989, after eight months
of debate, Congress created the Resolution Trust Corp. to make
depositors whole, investigate allegations of wrongdoing and deal with
the husks of the S&L industry.
At the time, skeptics warned that government was reaching too far into
the marketplace, and predicted darkly the RTC would be saddled with
bad assets for generations.
Indeed, the government ended up owning shopping centers, homes and
resorts, along with an odd collection of assets put up as collateral
for S&L loans, including Picasso and Warhol paintings, a 30-horse
merry-go-round, a Colonial-era whiskey distillery, a drawstring made
from Martha Washington's gown and 800 units of semen from a registered
By the time the S&L cleanup was over, it had cost U.S. taxpayers about
$124 billion in non-inflation-adjusted dollars, according to FDIC
research. Mr. Davison, the FDIC historian, wrote in a 2006 journal
article: "Perhaps a measure of the RTC's success is that little more
than a decade after it closed, this agency that provoked so much
debate is now largely forgotten."
And we are still here.
It is not Macbeth that murders sleep - it is CNN.
"Good night, sweet prince. May flights of angels sing thee to thy