The Economy's Safety Valve

Does a healthy global economy need periodic financial crises?

This may be a touchy question to ask, with Wall Street firms grimly toting up the cost of their bad subprime bets and the U.S. housing market nowhere near bottom. Still, we've seen five major financial disruptions over the past 20 years, starting with the October, 1987, stock market crash. Each event, when it happened, seemed potentially destructive. The 1990-92 credit crunch, for example, was called at the time the biggest banking crisis since the 1930s. And the 2000-02 tech bust was by some measures the worst bear market since the Great Depression.