Wall Street suffered 20 years in the desert before regaining its traditional foothold in the American economy. Brokers and investment bankers became pariahs. Their testimonies before congressional committees only reinforced the impression that they had something to hide. Politics and public opinion were firmly against them. Politicians legislated against them and the public voted by closing its purse.  All of this is familiar in the current crisis, but the story only begins here. The most damaging outcome of the Great Depression was the collapse of investor confidence and its effect on raising new capital for corporations. No one was interested in investing in a new issue of stock or new bonds if the Wall Street underwriters could not be trusted.  As a result, capital investment flagged badly until the post-war revival. Even during World War II, the Roosevelt administration distrusted Wall Street so much that it effectively relegated it to a secondary role in financing the massive amount of war bonds necessary to conduct the war.  In the contemporary world, putting money under a mattress is not considered an investment option. But investor confidence in the stock market has been badly shaken while the market for quality bonds has benefited.  This is where the parallels between the 1930s crisis and today's crisis become unsettling. Future growth in all sectors of the economy ultimately depends on investors. Their opinions on the crisis can be seen in the high price of gold, a rapidly declining (and volatile) stock market, and declining bond yields. Market volatility impoverishes more investors than it enriches. Ultimately, it just scares them away when they are needed most.
The events look and sound familiar. A stock market collapse and a debt crisis forced the United States into dire economic circumstances that no one anticipated. At congressional hearings on the