So we all know that last time Wall Street almost destroyed the country, they were at least held to some account. People were angry, as was -- gasp -- the President. In FDR's inaugural address, he blamed the banks directly -- "rulers of the exchange of mankind's goods have failed through their own stubbornness and their own incompetence, have admitted their failure, and have abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men" -- and thereafter he signed Glass-Steagall, created the FDIC, the Securities and Exchange Commission, and, you know, re-organized American society for the better.
What did we get? A cabinet stocked with Goldman alums, the Tea Party, and a Fox News-era media environment where to even suggest that maybe, just maybe, the banks should be punished for using parlor tricks to get rich while nearly scuttling the economy is "class warfare."
How times have changed. In 1933 not only were people unafraid of addressing the culpability of Wall Street -- they talked about "banksters." A nice neologism, one coined by Ferdinan Pecora, a self-made Italian lawyer who became famous when he hauled some of the country's leading Wall Street figures before the Senate and publically grilled them about their role in the market crash. I read about Pecora at the Smithsonian Blog, and the brief synposis is wildly entertaining, but also crazy-making, as it invites the question: why can't our representatives question these people, expose their crimes, and have the satisfaction of hearing a sitting Senator say: “The best way to restore confidence in our banks is to take these crooked presidents out of the banks and treat them the same as [we] treated Al Capone.”
Maybe the Capone reference would be dated. Could be changed to Madoff, I guess. But: another sign of how times were different then is a small but strange detail from the Pecora commission story, which I have to admit is my favorite part, despite that it is silly and totally undermines the whole populist anger part. Ready? Ok. Here goes.
Apparently, during the Pecora commission hearings, the Ringling Brothers circus was in town. And as Pecora and various Senators were questioning J.P. Morgan, Jr., one of the circus attractions, a 21-inch tall woman named Lya Graf, found her way into the Senate room and then onto the lap of the despised banker. This is true. It looked like this:
“Where do you live?” Morgan asked the girl.
“In a tent, sir,” she answered.