One-hundred and thirteen years ago, in the midst of the deepest depression of the 19th century, William Jennings Bryan, the Democratic nominee for president, addressed his party’s 1896 convention with one of the most famous speeches in American history. The program Bryan called for in his “Cross of Gold” speech was what would now be called a “stimulus plan,” based around taking the country off the gold standard. The issues are long since moot (we dropped the gold standard in 1935), but the resonance remains, because Bryan’s real subject is not the gold standard but the Manichean struggle between the “idle holders of idle capital” and the “struggling masses” who produce the country’s wealth.
Economies are cyclical, and therefore economic rhetoric is cyclical as well. The words and cadences differ, but the basic subject remains. Before there was Henry Waxman, there was W.J. Bryan. And before there was Merrill’s John Thain, there was Charles Mitchell. Back in 1933, Mitchell, the president of National City—believe it or not, the predecessor of today’s Citigroup—was called before Congress to explain why in the three years leading up to the crash of 1929 he paid himself $3.5 million (the equivalent of $40-million-plus today) in salary. The details of the crisis change, and the names change, but if you wait long enough—in banking, as in so many other things—history does repeat itself.
Financial crashes make fertile soil for moral dudgeon—if outrage were measured as part of our gross domestic output, the economy would be on a tear right now. Understandably so: The fire hose of daily news about Wall Street has revealed a startling level of cupidity and ineptitude in the banking industry.