I remember The Depression pretty well, not only because I saw some of it with my own eyes (I was 11 in 1931) but because I did a lot of research on it for a book I never published. What you youngsters don’t know is that it came in two halves, like a football game.
First half was The Crash, in 1929. As the country was gradually beginning to try to get over that, along came the second half, around 1931. That’s when European banks began to fail, and the contagion spread to American banks, so that when Franklin D. Roosevelt got elected in 1932, America’s banks were going bust so fast that the first thing he did after he was sworn was issue an executive order for a national bank holiday so teams of examiners could see which ones were about to fold, and keep them closed until they could be shored up. Or if they couldn’t, they would at least pay back part of what they owed their depositors. That was bad, but it wasn’t as bad as getting nothing, and the banks that stayed open had the confidence of their depositors, because the weak sisters had been screened out.
If we do come to that over Europe’s present tawdry banking messes — it seems that their bankers aren’t any more honorable than our own — I think Obama, if re-elected, would do something like what Roosevelt did, with, I hope, similar results. Mitt Romney I do think likely to perform more like Herbert Hoover. That is, urge everybody to be calm and not make things worse, while he watched the banks go under, one by one.
Oh — and speaking of Europe’s banking scandals, one of the first things Romney did on arriving in London was to go to a fund-raising gathering of London bankers. A number of them appear to be implicated in the rate-fixing Libor scandal. As long as they’ll give him money, Romney doesn’t seem to care.