On the recession

Rick Newman talks to John Steele Gordon who made a few points about the recession in light of history.

Failure is important in capitalism. It’s what keeps our noses to the grindstone. If you can’t fail, why work hard?

It also leads to innovation. Show me a socialist world that’s produced any innovation. Fear of failure puts the fear of God into you. This country, for the most part, is very understanding of failure.

Banks are a special case. They’ve always been and always will be the circulatory system of the economy. If they had gone poof, it would simply have been horrific for everybody.

In the 1930s, the guys running Japan and Germany thought we were pretty soft. Obviously they were wrong. We’ve been the richest country in the world since colonial days. One third of the Hessians who fought for the British in the Revolutionary War looked around after the war and decided to stay here. They must have liked what they saw. We’ve always been accused of being soft. I don’t think it’s any different today.

my grandmother told me that during the Depression she told the maid that if anybody knocked on the back door, to give them some food but tell them there was no work. Think about that—people knocking on doors looking for work and food. That’s unimaginable today.

Credit used to be a privilege. Only after World War II and the GI Bill did the majority of people start buying homes on credit, with mortgages.

We often take the world we live in for granted. Every now and then it is a good idea to consider just how special it is.

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