Chapter 9
Watchman, What of the Night?
In 1953, John Kenneth Galbraith was finishing his history of the 1929 stock market. He needed a title for the final chapter of his book, The Great Crash. Somehow he came across verse 11 of Chapter 21 in Isaiah: “Watchman, what of the night?” It was a fitting title.
In less than eight pages, Galbraith described how new laws, including the Securities Act of 1933 and the Securities Exchange Act of 1934, would better regulate Wall Street. But the chapter, which mostly detailed how politics and other realities would insure those rules fell short of their promise, and their spirit.
Galbraith likely never imagined just how far short those rules would fall. Those depression-era laws, forged when Franklin Delano Roosevelt was President, now loom like monuments immune to the technological and financial innovations that have changed the fundamental nature of markets and Wall Street. The stock market of 1929 bears no resemblance to the stock market of 2012, which will not resemble the stock market of 2112.
In 2011, in the shadow of a financial crisis that rivals the Great Crash in scope and destruction, but lacks a suitable poetic sobriquet, the federal government once more enacted laws to rid the market of self-destructive behaviors that nearly led to its destruction. The watchman has seen this before. His answer to the eternal question, as contained in verse 12, Chapter 21 of Isaiah, offers as little solace as Galbraith’s conclusion: “Morning is coming, ...
