As to how American bankers got themselves into such a fix is a long and winding story that doesn't feature many outright villains. If you want to a villain blame the Ghost of 1929 and the ghost that nobody, including Pundita, likes to talk about: the Ghost of 1914.
Things happen; "little pebbles," as Larry Summers called it when he spoke with BBC's Katty Kay last year about the strange banking crisis that arose in Cyprus. And Mark Safranski, writing last September at his Zenpundit group blog about the rude habits of the irrational, underscored the peril of war strategists ignoring the element of surprise in their calculations: "Sometimes, the Czarina dies, the unsinkable ship sinks ..."
Yes. And someone whose name no one but a historian can remember shoots an archduke whose name is also forgotten to all but historians, and here we are today.
Against the chain reactions and convergences set off by surprise events is the resolve exemplified by Franklin Delano Roosevelt and the Oklahoma farmers he spoke with during the Dust Bowl nightmare. He told them he couldn't promise he could rescue them from their plight but that he could promise he would not give up trying. That was enough for the farmers, most of whom toughed it out on their farms through that hellish decade.
Roosevelt, for his part, kept to his promise. He tried everything and pushed his "brain trust" of advisors to try everything; when one thing didn't work, he told them to try something else.
Eventually, one of the men in the brain trust got the idea that if the farmers plowed their fields in curves rather than straight lines, this would preserve just enough moisture from dew and the sparse rainfall to allow the seeds to sprout and put down roots.
At first the farmers rejected the idea and so did many edcuated observers. Even those who agreed that the curved plowing could preserve moisture in the soil said that it wouldn't be enough to bring the land back in the searing drought. Others said that it would take a generation for the land to recover even with the curved plowing practice.
Having tried everything else, and with nothing left to lose, the farmers decided to try the plan. The land came back in 18 months. 18 months. The moisture preserved by the curved plowing was just enough to let the seeds grow and survive.
Then, finally, finally, the interminable drought ended.
President Roosevelt was literally and figuratively a rainmaker. When he went out to speak with the farmers a rainstorm arose, even though there was no rain in the forecast, even though the drought was still in full force and it wasn't the rainy season. He wasn't met with just a few sprinkles. He spoke to the farmers in pouring rain.
I remember that story, which I learned about from watching Ken Burns' documentary, The Dust Bowl, whenever I disagree with Roosevelt's politics and aspects of his management of the U.S. effort in World War Two. It's been said that it was his constant battle with polio that made him open to trying new approaches to solving problems; in any case he didn't know what it was to give up.
It is not given to humans to know it all, but it is given to us to try -- and by "trying" this doesn't mean trying to hammer the same square peg into the same round hole, as economists who live in fear of the Ghost of 1929 are doing.
You can draw your own conclusions from the heavens pouring forth rain on Roosevelt in the midst of a drought, but in my view if that incident isn't inspiration to keep trying, and keep trying different approaches, I don't know what is.