FINANCIAL MELTDOWNS ARE NOT NEW CONCEPTS
On September 29, 2008, the DJIA had a record-breaking drop of 777.68 with a close at 10,365.45. The DJIA hit a market low of 6,443.27 on March 6, 2009, having lost over 54% of its value since the October 9, 2007 high.
Financial problems must be dealt with. They do not go away if you ignore them. The world is facing yet another crisis.
Of course, the particular tragedy of this crisis is that the example of the Great Recession is there for all to see, burned into memory. Indeed, key institutions are helmed by scholars of the Great Recession while other institutions are a direct legacy of the turmoil it produced. No one involved should have any illusions about where this could go if things are mishandled badly enough for long enough.
But maybe that awareness is actually baggage, a source of complacency. We may make mistakes, policymakers think, but at least we know how to avoid that. Do they? Around the world, faith in that particular truth is faltering. Restoring it without first stumbling into catastrophe may take a miracle.