Teaching History So We Pay Attention Next Time

There is something so arrogant about American culture: we think we are beyond history, that history just isn't important to us. It's part of the myth of American exceptionalism that drives me mad.

Business cycles happen. They happen all of the time. They are predictable, not to the day, but to the fact that eventually a bubble of financial excess bursts. Although I am getting closer to understanding what a credit default swap actually is, which is the immediate cause of our current situation, I am learning a lot about the history of money and the business cycles that are inherent to the investment risk phenomenon. The mess we are in is not so different from the savings and loan mess, the ENRON mess, the mess that led to the outbreak of World War I, the aftermath of World War I that led to World War II.

Whether it was defaulting government bonds, or deregulated local banks that suddenly invest outside their communities, or permitting credit default swaps, what we need to pay attention to is that there is greed and excess built into every business cycle. According to George Soros, the king of the hedge fund, the Hungarian immigrant who is the source of funding for many progressive causes both here and abroad, the irrational and ignorant acts of investors often lead to market trends. We can't forget that we do make a difference. That economic theory is only theory, but reality is often based on real acts by real people with real consequences, and that those acts might not be the result of the smartest or the best decisions.

Which leads me to the conclusion that we don't teach history well in high school, college, or graduate schools. In today's New York Times, there is an article about changing how we teach students in business schools. It's got to start way before then. We are not beyond history. If we don't get that, we will be history.