What thankfully remains the Great Depression brought a deluge of measures from a newly minted Democratic president intent on reforming banking and Wall Street.
Eighty years later, another severe recession has sparked a similar outburst of reformatory zeal from another Democratic first-term president. The targets of his sweeping proposals have greeted the initiatives with reactions ranging from caution to skepticism to outrage.
As a new decade dawns, President Barack Obama is making slogging but steady progress across a number of reform fronts, including health care, financial markets, executive compensation and the environment. Whether it ultimately will lead to landmark measures that will fondly be recalled the next time talk of a new Great Depression rolls around remains to be seen.
But there is no doubt a host of new laws and regulations are coming that businesses will have to respond to. Uncertainty over what the new rules will look like is fueled in part by the biblical proportions of some of the proposals, including the 2,000-page plus health care reform measure.
"Who knows what's in that law when it passes because it's like 30 pounds and inches thick," said Don A. Linzer of Schneider Downs, a Downtown firm that counsels clients on accounting, tax and other issues.
National Association of Manufacturers President John Engler has read enough to know he doesn't like it.
"This bill raises costs for manufacturers at a time they can't afford it," the former Michigan governor said of the Senate proposal.
Whether it's concern over whether federal tax incentives will be extended or the impact of health care legislation, the uncertainty compounds the reluctance of business owners to invest in new projects or expand their payrolls.
"If I'm looking to hire someone now, I could be hiring a time bomb," said Antony Davies of Duquesne University's Palumbo-Donohue School of Business. "So business will be loath to take on new employees until the rules of the game are settled."
Even before those changes come, businesses realize the Obama administration can use existing laws and regulations in ways the Bush administration did not. A case in point is the U.S. Environmental Protection Agency's finding last month that greenhouse gasses endanger public health. The conclusion increases the agency's authority to regulate emissions from power plants, factories and automobiles.
"The president is strongly in favor of using regulatory authority to regulate carbon dioxide," said American Iron and Steel Institute President Thomas J. Gibson. "That's something that really needs to be left to Congress."
He said that even one year into the new administration, industry doesn't have a clear idea of how the regulatory agencies will proceed because the White House is still filling senior positions in some of the agencies. The head of the Occupational Safety and Health Administration, an agency which Mr. Gibson expects to take a more active look at steel producers, just took office last month.
Much of the reform stems from the problems and excesses in the financial services industry. One Western Pennsylvanian understands the push for closer scrutiny.
"The regulatory agencies are very concerned about what's been going on the last two years. I think they're going to be very diligent about their investigations," said William J. Burt, president of Gateway Bank in Peters. "We understand it. We know we're regulated, and we stay within the guidelines."
The 5-year-old bank has $115 million in branches in McMurray and Cranberry. While the Obama Administration is pressuring banks to lend more money, Mr. Burt said Gateway has made loans equal to more than 90 percent of its deposits.
"There is money available. Banks will lend money," he said. "It's a credit quality issue."
Mr. Obama's sharp remarks about bankers last month reflected public anger over credit availability as well as Wall Street behavior. Last year's furor over bonuses at AIG, the giant failed insurer now majority-owned by the U.S. taxpayer, was another example.
But a former vice president of the New York Federal Reserve Bank said it was wrong to affix the blame on one group.
"In order to have a crisis this severe, it takes a lot of people working together" including regulators and consumers, said Ernie Patrikis, the co-leader of New York law firm White & Case's bank practice.
He has misgivings about financial industry reform legislation before Congress, believing that it will raise borrowing costs for consumers. Mr. Patrikis also predicts reform will spur an expansion in what he calls the "shadow" financial world as companies inevitably find ways around regulation.
While the former Fed official won't place blame on one party, Dr. Davies will. He thinks the White House and Congress are trying to cure the economy using the tools that made it sick in the first place.
"I would put the bulk of what we've gone through on government regulation. What we're looking to do now is invoke the same tonic that got us into this thing," the Duquesne professor said.
Len Boselovic can be reached at firstname.lastname@example.org or 412-263-1941. First Published January 3, 2010 5:00 AM