mbborak

Is Financial History Bunk?

I think this article reflects the author's frustration with the impossibility of finding a neat historical reference point that explains the present market conditions and predicts a future outcome. Certainly, many out there in the financial press try to oversimplify current and past recessions into "narratives" that can be easily understood in one concise (and easily published) article. The expectation that we can simply point to a previous recession and say "ditto this time!" needs to be put to rest.

History can definitely lend insight into the current market turmoil, but because we are in the middle of it and have so far seen outcomes that were largely unexpected, the instinct is to throw our hands up and say that history has failed us. I simply cannot believe that there is nothing to learn from past events in our financial history, and I would argue that up until the Fed and Treasury started their meddling, a prudent financial historian could have largely predicted the onset of this recession (and several did). The picture is certainly cloudy and there are no easy answers. To echo Mark Twain, history gives us clues, not prophecies.