Collective Human Memory seems to span only the last 20 years.
When I talk with people about the recent Real Estate collapse, I usually mention the previous collapse of 1989. And usually I am met with blank stares.
"Really?" they say, "There was a Real Estate collapse back in 1989?"
And then they usually accuse me of making it up.
Now, if the person I am talking to is like 30 years old, I guess I can excuse them, as they were only about 10 years old then, and might not remember it. But many people well over 40 seem to have forgotten that housing prices in many parts of the country dropped by 20-50% or more, and that there was a wave of foreclosures that took nearly five years to complete. People lost their homes or lost tens of thousands of dollars. And much of it was due to "funny money" toxic ARM loans. Back in 1989. Seriously.
Similarly, few people remember the "S&L" crises of the 1980's and the "Resolution Trust Authority" taking over these uninsured institutions and oftentimes many people (such as my Sister) losing their deposits. Banks going under? It's never happened before, right?
Very few people, it seems, remember "Even and Odd gas days" - and when I tell someone under 40 that back in the 1970's, you could only buy gas on a even day if you had an even license plate number, and on an odd day if you had an odd license plate number, well, they look at you like you are from Mars.
These are, of course, the same people who bought 8 MPG pickup trucks with "Hemi" engines and then acted all surprised when gas shot up to $5 a gallon. Gee, we've never seen that before! Um, except like four times previously, going all the way back to 1973.
Few people even remember the "dot com" bubble of 1995, and are instead, at the present time, hyping the snot out of "dot com" stocks again and bidding up prices. "Profits are a thing of the past!" they say, the echo of the "new paradigm" ringing down through the ages - well, at least from 15 years ago.
Who today remembers the "Gold Krugerrand" craze of the late 1970's and early 1980's? Everyone was going to buy gold coins, because the economy was in the tank! Better buy GOLD baby! Because when it all falls apart, that's all that will be worth anything! Those folks quietly lost their shirts in the 1980s and many are still "underwater" on their 1982 "investment" in Gold.
Human memory, or at least collective human memory, seems to be a very transitory thing. You can sell snake oil to the townspeople only hours after they've tarred and feathered the last fellow who came into town selling the exact same thing. "Gee, that snake-oil sure do sound fine!" they say, brushing loose feathers from their jacket, "but where have I heard that before?"
Benie Madoff is only the latest in a long, long, line of flim-flam artists - Ponzi men - who pay off investors with proceeds from new investments. It's not like we've never heard of the scheme before - we even named it after the first guy caught doing it - Charles Ponzi. But there they are, the scared investors, with eyes like deer-in-the-headlights. "Who knew such a thing could happen?" they say, "After all, it's never happened before!"
Those who do not learn from history are doomed to repeat it. Perhaps this is part of our human nature, to make the same mistakes, over and over again, until we die, like Sisyphus pushing his rock up the mountain, only to see it roll down, again and again.