Lessons from the Great Depression

Senior News Analyst Daniel Schorr remembers a time decades ago when the nation's economy collapsed — and what resulted from that crisis.

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DANIEL SCHORR: This commentary will undoubtedly stamp me as an unreconstructed liberal, but here goes.

LIANE HANSEN, Host:

NPR's senior news analyst, Daniel Schorr.

SCHORR: I am old enough to remember vividly the stock market crash of 1929 followed by the Great Depression. I remember the suicides on Wall Street, and I remember men on street corners selling apples for a nickel each, if memory serves.

SCHORR: regulation. To restore confidence in the banks, the federal government would set up a system to insure them against going bust, but in return, the banks would have to operate under a federal regulatory system to keep them from taking undue risks.

Regulation is a term that true-blue conservatives abhor, yet it is needed more than ever in this complex world. A crane topples over in Manhattan, and it turns out there was not adequate inspection. And Southwest Airlines is found to have flown dozens of older planes without adequate FAA inspection.

With the credit crisis of today, we don't see runs on banks such as we saw in 1930 and '31. Instead, what we see are unregulated investment banks like Bear Stearns that dabbled in the mortgage market and set off a chain reaction.

Franklin Delano Roosevelt responded to the credit crisis of his time by closing the banks temporarily and calling on Congress to set up a regulatory system. It is not likely that this regulation-averse Bush administration will seek supervision of financial markets.

As the Sherman Antitrust Act shows, the key to a free market is necessary regulation. After all, we don't want to see the return of apple peddlers on street corners or songs like "Brother, Can you Spare a Dime?"

This is Daniel Schorr.

(SOUNDBITE OF MUSIC)

HANSEN: You're listening to NPR News.

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