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I never took a formal economics course, so you are, to some extent way ahead of me. I read a number of books on the 1929 crash many years ago. I'm not sure what you want to know, but here is how I see things.
The 1929 crash resulted from unregulated and sometimes even fraudulent practices in financial transactions, especially in the purchase, sale and marketing of stocks and also, unchecked development of Ponzi schemes.
After the 1929 crash, economists, the Roosevelt administration and Americans in general decided to regulate the sale of stock in public corporations, banks, and other aspects of business. For many, may years, our economy flourished under a system of regulation which I associate with the name of Galbraith that attempted at least to insure that investors could obtain honest information about the assets and debts and value of companies, and that banks would maintain certain fiduciary and financial standards in handling other people's money as well as their own.
Business did not like that. And the bigger businesses have become, the less they have liked it. Gradually, the conservative economic philosophy of Milton Friedman and the Hayek school of economics came to dominate the thought of scholars, conservative and even fairly liberal politicians. Beginning with the Reagan administration and to some extent during the Carter administration, the mantra of governing less is governing better became popular. The idea of free markets meaning markets with minimal regulation began to be viewed as the ideal.
Many areas of business have been deregulated since the Reagan administration. Changes were made regarding the regulations for S&Ls, many of which were small, local financial institutions that had for many years specialized in serving the needs of communities they understood and of which they were a part, especially with regard to providing mortgages. To stay competitive for the money of the local population they served during the period of high interest rates of the Reagan era, the S&Ls needed to offer interest rates that were high generate enough revenue to cover the interest that they had to pay to keep solvent.
As with the current sub-prime mortgage crisis, the S&Ls began to make loans on properties that were overvalued. S&L managers were overly optimistic about the kinds of projects that would be profitable in the communities they served. In addition, some S&L managers actually committed fraud such as selling properties to buyers who weren't really buying anything in order to be able to issue a new loan on the property at a higher valuation. The idea was to create the appearance that the S&L had good assets to back its debts. That was false. Anyway, due to a number of these factors, S&Ls began to fail or appeared to be approaching failure. My understanding is that the Resolution Trust Corporation was created as a vehicle for selling bundles of properties owned by failing S&Ls to investors with enough money and assets to qualify to buy the bundled properties.
The S&L crisis decreased the number of lending and saving institutions and promoted the emergence of mega-banks and consolidation in the banking industry. To "save" the economy, large amounts of real estate and mortgages were transferred from failing relatively small, local S&Ls to huge lending institutions and very, very wealthy buyers.
We are now seeing a very similar process which will end with mortgages and properties being sold in bundles to the mega-investment companies. The current crisis involves financial institutions all over the world. I suspect that one major result will be that foreign investors in the megabanks such as Dubai with Citibank will end up owning many of the mortgages and foreclosed properties in the U.S. So, we have moved from local S&Ls providing mortgages to their friends and neighbors between the 1930s and the 1980s and now, lenders in Holland and Dubai owning the banks that hold the mortgages on our homes and farms and commercial buildings. Who needs terrorists. This is really, really evil in my view.
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