Saturday, 18 January 2014
"Our society wasn’t always this way. In Edith Wharton’s novel “The Age of Innocence,” set in the 1870s, the arriviste Julius Beaufort’s bank fails (it appears not to be fraud, just recklessness). Mr. Beaufort is banished from New York society for a generation.
After the crash of 1929 and the Great Depression, major Wall Street figures populated prisons, not presidential advisory panels. The head of the New York Stock Exchange, Richard Whitney, who hailed from one of the most patrician families in America, went to Sing Sing for embezzlement.
In 1936, Roosevelt gave his famous speech listing reckless banking and speculation among the “enemies of peace.” These enemies hated him and he asserted, “I welcome their hatred.”
It wasn’t just rhetoric. F.D.R.’s appointees “were neither impressed by, nor subservient to, bankers,” said Eric Rauchway, a historian from the University of California, Davis. Roosevelt appointed people like William O. Douglas, the future Supreme Court justice, as head of the Securities and Exchange Commission. He threatened to nationalize the stock exchange."