Friday, December 19, 2008

Does History Repeat Itself?

Does history repeat itself? I believe it does to a certain extent. It seems that we tend to ignore history and the lessons it provides. Experience really is the best teacher. If we can let another’s experience be our teacher, we can avoid many headaches.

In my lifetime, I don’t expect that there will be another mortgage crisis. Why? I believe the banks and other lenders will not be handing out subprime or other risky loans. That lesson is fresh with us, and those who go back to those practices will be thought of as stupid or na├»ve. The lessons of the Great Depression were very vivid to those who lived it. The interesting thing is that the Great Depression generation is mostly gone. Those who lived through the Great Depression had very sound financial values. The following generations slowly lost that as time went on. Today’s generation will not soon forget the lessons from today’s economy, however, the following generations will, most likely, at some point get themselves into a similar situation.

I have heard it said that the definition of stupidity is keep doing the same things and expecting different results.