It’s Deja Vu All Over Again
As we all freak out over the government takeover of some areas of the nation’s financial sector it’s important to remember that we have been down this road before and it is nothing new. In the 1930s, the Reconstruction Finance Corporation made $3 billion in loans ($400 – $500 billion in today’s dollars) to distressed banks and bought stock in 6,000 banks. Here’s a quick rundown courtesy of the International Herald Tribune…
- 1917 – The government seizes the nation’s railroads to make sure troops and supplies can move uninterrupted during World War I.
- 1939-1945 – The government seized a number of companies, including railroads, coal mines and even the Montgomery Wards store chain for a brief time, in an attempt to aid the war effort.
- 1952 – Harry Truman temporarily seizes 88 steel mills across the country to avoid a national strike during the Korean War. That action was later ruled unconstitutional by the U.S. Supreme Court.
- 1984 – The U.S. Government took an 80 percent stake in Continental Illinois National Bank and Trust. Because Continental Illinois was one of nation’s top 10 banks, it was deemed “too big to fail” by federal regulators.
Any of this sound familiar?
