"The most important inheritance from the 1930s was simply the memory of it. The habits of mind developed during the terrible experiences of those years kept our business leaders from throwing caution to the winds and from forgetting the realities of risk. A good ten years had to pass before capital spending really took off, and it then languished again soon after the boom topped out in 1957.

Although I just turned 50 in 1969, I was already an old man in the financial community. Similar trends were apparent in the corporate world as well, as leadership was beginning to pass to a generation for whom the Great Depression was something they had only read about in the history books, rather than a real experience. This naturally led to much more carefree attitudes toward risk. Indeed, the new breed were convinced that it was they who were moving the world, they who knew all the answers, they who were masters of the fate of all of us, when in fact the absolutely necessary precondition for their achievements was the sense of caution and care that the older generation had carried forward from the depression era.

This is where this whole long story should drive itself home: the high profits that were the consequence of the caution and conservatism of the past were leading inexorably to overbuilding of capacity, excessive risk-taking, and burgeoning debt leverage. Just when we thought we were masters of our fate, we were preparing a fate much different from what we felt certain lay ahead.

The euphoria of these businessmen was ultimately the cause of its own demise." — Peter Bernstein

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