"Have we been here before?" asked history professor Eric Rauchway at a campus panel discussion on the unfolding economic crisis.

Speaking before about 60 people at the Institute of Governmental Affairs-sponsored event on Oct. 17, Rauchway traced the historical significance of the current financial panic back to the Great Depression of the 1930s, which resulted in key economic safeguards for the United States, he said.

"Now we have the FDIC (Federal Deposit Insurance Corp.), unemployment insurance, Social Security and a better Federal Reserve," said Rauchway, the author of the new book, The Great Depression and the New Deal: A Very Short Introduction.

He believes the federal government is taking its strongest measures since the 1930s to protect the financial sector and the overall economy.

Rauchway described the contributing causes of the Great Depression, including President Hoover's unwillingness to intervene in the economy because of fears of socialism. On the other hand, President Roosevelt's administration took a more aggressive approach to managing the economy.

'Out of line'

The panel discussion, "Understand-ing the Financial Crisis," was hosted by Alan L. Olmstead, an economics professor and the institute's director. Other participants included UC Davis economist Alan M. Taylor and finance professor Brad Barber.

After a brief introduction by Olm-stead, the first panelist to speak was Taylor, an economics professor and director of the UC Davis Center for the Evolution of the Global Economy.

Taylor, who specializes in international economics, economic history and development economics, talked about the origins of the crisis and the global basis for the current difficulties. He said the housing bubble "fantasy," that housing prices would rise forever, as one of the contributing factors to the crisis and said it was "out of line with fundamentals. This was a failure of risk management."

Barber, the director of the Center for Investor Welfare and Corporate Responsibility, highlighted the bad habits of individual investors, including not saving enough and trading too much.

He also emphasized the riskiness of investing. "As you know, the higher the risks, the higher the average returns. But money is a tool, not a means to an end."

To watch a video of this panel discussion, visit www.ucdavis.edu and click on "Economists, historians help us understand economic crisis."

Haley Davis is a Dateline intern.