Before we all forget again, as humans so easily are prone to do, that big government in the US and Europe is complicit and culpable in the cause and worsening of the Great Recession let’s quickly revisit two issues here.
Government Bailouts Of Businesses Are Nothing New
Thanks to Jason Zweig’s “The Intelligent Investors Column” (subscription required) published in the Wall Street Journal on 3/9/2013 I just learnt that the famous British Barings Bank (one of the most famous British merchant banks; which so dramatically collapsed in 1995 thanks to a ‘rogue’ trader) was bailed out by the Bank Of England in 1890, because this bank had overinvested in Argentinean bonds. The close (perhaps crony/cozy) relationship between the Barings family and the British government is another topic of interest.
May I conjecture for a moment that it was perhaps more common during the pre-industrial age that rich business men bailed out nobility and kings than the other way around.
From what little I know about history it appears that since ancient times there has been a close relationship between government and the financial sector. As they say follow the money trail and money talks. Thus, I suspect the financial sector has always been under close scrutiny and direct or indirect regulation by governments probably more so than most other sectors of the economy.
Long before the Great Depression (at least since the Great Depression), the US financial was tightly regulated and monitored by government. Those deregulatory measures passed in the 1980s or 1990s did not really undo this tight oversight by government. That is a myth.
A History Of US Government Bailouts
When you google/bing it you find it sometimes: http://www.propublica.org/special/government-bailouts
I can somewhat recommend this website by ProPublica, although it appears incomplete.
Unfortunately, this webpage has not been updated since April 2009. As I said at the beginning, to forget is human. To move on is easy and convenient, and ignorance is bliss.
At least, the two authors of this webpage, i.e. Jesse Nankin and Krista Kjellman Schmidt, have traced back US government bailouts to 1970. They also included municipal and non-financial bailouts.
The first bank bailout in the US according to this webpage occurred in 1974: “Franklin National Bank. In the first five months of 1974 the bank lost $63.6 million. The Federal Reserve stepped in with a loan of $1.75 billion.” Prior to discovering this webpage, I was only aware of the bank bailout of 1984 of the Continental Illinois National Bank and Trust Company, which is also listed by the authors.
The authors for some reason omitted the Amtrak story, which also started in 1971.
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