Still Waiting for a Bank Holiday

There's little doubt that the bear market of late has happened as a result of private sector conduct and the public sector's failure to oversee the private sector. The question for the next president will not be if their administration should act in response, but how it should act. I asked for a bank holiday for the whole financial services sector in this blog in March. It clearly hasn't happened yet.

My question today is what comes next. Government involvement proposed thus far hasn't amounted to any real benefit at all (beyond psychological benefit); it's just to early in the game to see if the money allocated for future spending will be spent in the right places and in the right amounts.

I'm curious as the plan to move forward takes shape if it will focus on jobs as well as the reform of financial institutions. There's no question that the New Deal had some real shortcomings; but for all its shortcomings Roosevelt's plan was more comprehensive than the current plan because it dealt with both the needs of the unemployed and and the crisis in the banking sector. If politicians learn anything from history let it be that the whole nation has been effected by the financial crisis and that its not enough just to create jobs or just to pump money into FDIC insured banks and uninsured institutions that act like banks to keep them afloat.

The New Deal drove the economy of the working class for most of Roosevelt's first term; but it wasn't enough; banking and investing needed reform. Still after all is said and done even the New Deal alone wasn't enough to rebuild the national economy. Roosevelt created his own mini depression by trying to end the New Deal in his second term. Unemployment rose because the private sector wasn't able to employ those who had earlier been employed through the New Deal. History has many lessons to teach our next president if anyone is ready to help him listen.

Published simultaneously at Unlikely Banter on Newsvine