If I were a newspaper editor right now I’d be ordering more stories like this Bloomberg piece, which gropes for historical comparisons to where we are now and finds one in Scandinavia’s financial crisis of the late 1980s and early 1990s.

Ridiculous? Sure. How can you compare this $700 billion catastrophe (and that’s only the taxpayers’ stake; never mind the borrowers’ loss of equity) to one in Sweden, Norway and Finland that cost only $14 or so billion to fix?

But I wonder if I’m the only one who wonders whether we are stumbling through a storm—as “unprecedented,” “momentous,” and historic” as it may be— that previous generations have experienced before. Some of us readers vaguely remember from school that U.S. history was pockmarked with financial crises for most the 19th and early 20th centuries, culminating in the one in 1929, and that those stopped for a while.

Wikipedia provides a list:

—Panic of 1819: pervasive USA economic recession w/ bank failures.

—Panic of 1837: pervasive USA economic recession w/ bank failures; a 5 yr. depression ensued.

—Panic of 1857: pervasive USA economic recession w/ bank failures.

—Panic of 1873: pervasive USA economic recession w/ bank failures; a 4 yr. depression ensued.

—Panic of 1893: pervasive USA economic recession w/ bank failures.

—Panic of 1901: limited to crashing of the New York Stock Exchange.

—Panic of 1907 - pervasive USA economic recession w/ bank failures.

Coincidentally or not, the period following the New Deal did not suffer from financial shocks perpetrated by Wall Street. Those came after the deregulatory movement begun in the 1970s. (A PBS documentary last night showed Ronald Reagan finding his voice opposing big government while working for General Electric from 1954 to 1962. Watching it, I could only wonder:
What part of that period’s broad-based economic expansion—the one that essentially created the American middle class as we know it—didn’t he like?)

In any case, Bloomberg’s Scandinavian tale contains many parallels to our own:

At the end of the 1980s, the economies of Sweden, Finland and Norway had surged after deregulation and low interest rates encouraged banks to lend more. Finnish house prices jumped 80 percent in real terms, and its stock market soared 164 percent in five years, according to JPMorgan Chase & Co.

The byproduct was a mounting debt burden. As policy makers sought to slow inflation and protect their fixed exchange rates, banks found their balance sheets decimated by nonperforming loans amounting to 10 percent of the region’s gross domestic product.

The Scandinavians acted swiftly, like U.S. policymakers are doing today, and received wide applause:

The response to the subsequent financial crisis was one of “rapidity and vigor,” said then-Fed Chairman Alan Greenspan in a 1999 speech. Sweden guaranteed bank obligations against losses and established a $14 billion restructuring fund to provide failing banks with capital in return for equity. In addition to taking over Nordbanken AB, the government created a “bad bank” that bought troubled assets at a discount, while leaving financial institutions to manage their more-liquid holdings.

Norway’s government took similar steps by insuring savings and seizing control of the country’s three biggest banks. Finland merged more than 40 banks, including Skopbank Ltd., into a government-run entity and moved nonperforming assets to management companies run by its central bank.

And yet, even still, the result was unbelievably destructive (the emphasis is mine):

While the interventions “were sweeping and ultimately a success,” they didn’t bring immediate relief to the three countries’ economies, as banks cut back on lending and companies and consumers spent less, said Lauri Uotila, chief economist at Sampo Bank, a unit of Danske Bank A/S in Helsinki.

The Finnish and Swedish economies contracted in 1991, 1992 and 1993. Norges Bank calculates that during the early 1990s, output fell 12.3 percent in Finland, 5.8 percent in Sweden and 4.1 percent in Norway. Unemployment didn’t peak in Finland until May 1994, when the rate reached 19.9 percent, having fallen as low as 2.1 percent in 1990. Sweden’s jobless rate averaged 9.9 percent in 1997, up from 1.6 percent in 1990.

The Wall Street Journal makes a stab at historicism here:

Some politicians and bankers say the Gramm-Leach-Bliley Act, also known as the Financial Services Modernization Act, and other deregulatory measures set the stage for today’s mess. They argue that the mortgage-lending frenzy was fueled by companies like Citigroup, which raked in huge profits by repackaging mortgages into securities and selling them to investors around the world.

Good job. More please.

Other recommendations:

Read Barry Ritholtz’s 13 questions for Paulson and Bernanke, including my favorites:

Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.