Parini: Looking for Context

Print More

(Host) In an effort to understand the financial turmoil of recent years, and the movement called Occupy Wall Street, commentator Jay Parini decided to try to put it all in context.

(Parini) At first glance, you might think that our financial trouble started – at least symbolically – with the collapse of Lehman Brothers in September of 2008, and continued through the fiscal woes of today , resulting in “Occupy Wall Street,” an international movement that highlights the income disparity which has caused so much resentment and contributed to fiscal and social instability.

Any meaningful search for context must also look to Europe and the current crisis over the potential Greek default. In my view, a bond, floated by all seventeen countries in the Eurozone, would go a long way toward stabilizing the Euro, and it would have a positive effect on the U.S. as well as the world economy.

But my search for context took me all the way back to 1857, when a recession in Britain led to a panic in the United States, fueled by the fact that products from the American west had lost their markets abroad. Eastern banks had been funding farms and real estate deals in the west. When land values dropped, the banks panicked.

One of the big banks of the time was Ohio Life Insurance and Trust, with major offices in Cincinnati and New York. This bank had vast mortgage holdings in the west, and the drop in land values triggered a collapse of confidence in the bank itself. The panic spread, and merchants as well as farmers suffered when the value of their assets fell to levels below what they had borrowed. It took the Civil War to rebalance the books.

Recently, a colleague and friend, Becky Gould, came across a letter from Henry David Thoreau to his friend H.G.O. Blake at the height of the financial panic of 1857. He wrote, "The merchants and companies have long laughed at transcendentalism, higher laws, etc., crying, ‘None of your moonshine,’ as if they were anchored to something not only definite, but sure and permanent. If there was any institution which was presumed to rest on a solid and secure basis, and more than any other represented this boasted common sense, prudence and practical talent, it was the bank; and now those very banks are found to be mere reeds shaken by the wind. Scarcely one in the land has kept its promise."

So my search for context makes me think maybe it’s really is time to say “None of your moonshine” to the big investment banks and other Wall Street institutions. “Occupy Wall Street” is a motley crew, to be sure, without a clear vision of what should be done to avoid a new financial panic, a double-dip recession, or the dismantling of the safety net that has helped middle class as well as poor Americans since the time of Franklin Roosevelt and the New Deal. But this movement suggests there is still some life left in the old and nearly atrophied limbs of progressive activism, after all.

Comments are closed.