Couldn't it be for the same reasons as the powers that be balanced the budget in 1930 -- because it agreed with the reigning fiscal orthodoxy (which wasn't displaced until it after it had caused disaster); and because hard money just agrees with the deeply felt gut instincts of rich decision makers, since it's almost always a good thing when you own assets. Of course, they all know about that theoretical crisis case where it would be bad. But I don't think orthodox thinkers believe in crises until they have to. The very idea of crisis violates their common sense. They change their understanding only after they meet one. And then they make provisions to ward them off in the future. And then, as soon as possible, they forget, because it just doesn't fit in with their principles. And the displaced hard money orthodoxy, which does chime with capitalist common sense, returns.
On a smaller scale, the same mechanism seems to be at work every single time the stock market goes up for a while: a remarkable number of experts always arise to declare that this time it won't go down.
Sidney Morgenbesser, a philosopher who used to teach up at Columbia, often declared that this was true of most actually-existing worldviews. The rational ideal is that when we meet an idea that challenges our fundamental beliefs, we object to it, and then when we can't argue it away, we work at it until we find some way to fit it in, and all out other beliefs move over just a little bit to make room for it. But what really happens, he said, is that we say "Wow! That's really interesting! I'll have to think about that!" And then we go home and forget about it.
Michael
__________________________________________________________________________ Michael Pollak................New York City..............mpollak at panix.com