Podcast Summary: The Long View

Episode: Mark Higgins: Financial History Is More Relevant Than People Think
Date: December 2, 2025
Hosts: Christine Benz, Amy Arnott
Guest: Mark Higgins, Senior Vice President, IFA Institutional; Author of Investing in US Financial History

Overview

This episode centers on Mark Higgins’ insights from his book Investing in US Financial History: Understanding the Past to Forecast the Future. The discussion explores why historical financial patterns are often overlooked, how past crises inform present policy and investment decisions, and why financial history remains vital for today’s investors. Higgins draws parallels between historical and current economic challenges, offers views on asset allocation and behavioral pitfalls, and shares personal experiences that shaped his research and outlook.

Key Discussion Points & Insights

1. Mark Higgins’ Background and Involvement with Financial History

• Museum of American Finance: Higgins became involved after writing a paper on Hetty Green, leading to editorial board membership and guest curatorship (02:10-03:32).
• Research Motivation: The COVID-19 pandemic prompted him to dig into financial history for insights on unprecedented crises, quickly realizing that many “unprecedented” events have strong historical analogs (05:52-07:22).

“I realized that we’re so focused on what’s around us, maybe look back 10 years at most, and they miss really, really important patterns…”
—Mark Higgins (06:43)

2. Hetty Green: Misunderstood Financial Pioneer

• Hetty Green's Legacy: Higgins contends Green was the greatest US investor, maligned for traits that were essentially virtues—thrift, patience, and quiet philanthropy (03:53-04:51).
• Societal Misunderstanding: Societal biases influenced her historical reputation.

“If you could take every quality that she was maligned for... it wasn’t a vice, it was a virtue.”
—Mark Higgins (03:59)

3. The Importance of Looking Further Back in Financial History

• Going Beyond 1926: Higgins argues that many valuable lessons are found in periods before the start of commonly referenced data series, like the SBBI index (07:22-07:41).
• Constants in Human Behavior: While conditions change, human behaviors driving markets don't evolve as much as commonly assumed (07:41-08:08).

“They think that human behavior evolves and it doesn’t... conditions evolve, but the human behaviors are the same.”
—Mark Higgins (07:48)

4. Influence of Alexander Hamilton and Central Bank Dynamics

• Hamilton’s Lasting Legacy: Consolidation of US debt and creation of the first US central bank (10:11-12:21).
• Central Bank Controversy: Early debate reflected fears of centralized power and urban-rural economic divides (12:41-13:30).

“He foresaw... the development and the challenges of this nation more than well over 200 years ago.”
—Mark Higgins (10:21)

• Central Bank Independence: Historical failures to protect Fed independence led to major inflation events, a relevant lesson for today (13:30-16:49).

“If there’s one lesson from the great inflation... when inflation emerges and persists, you need to tame it... decisively.”
—Mark Higgins (15:08)

5. Learning from Market Bubbles and the Difficulty of Contrarianism

• Charles Merrill Case: Social and psychological challenges of going against the crowd, even when logical (16:49-18:46).
• Active vs. Passive Management: Historical evidence from the 1920s showed persistent underperformance by active managers, but incentives kept the model alive (18:46-20:54).

“There’s no shame in making a prediction based on sound logic, being wrong, learning from it, and moving on.”
—Mark Higgins (18:26)

6. Lessons from the Great Inflation and Federal Reserve Missteps

• Parallels to Present Day: Higgins draws parallels between current Fed actions and 1970s mistakes—reluctance to raise rates and letting inflation expectations become entrenched (21:10-22:10).
• Federal Debt Risk: The US’s current debt levels are historically anomalous and dangerous, especially if future crises arrive when debt capacity is exhausted (22:46-24:40).

“We have not had debt at these levels at all... This is very, very anomalous.”
—Mark Higgins (22:54)

7. Shadow Banking and Systemic Risk

• Definition and Dangers: Shadow banks are non-bank institutions operating outside federal support, heightening risks during crises (24:54-26:06).
• 2008-09 Crisis: Illustrated the inability of the Fed to support shadow banks in a panic, emphasizing the need for system transparency.

8. The Current Market and Alert for New Bubbles

• Unrealistic Returns and Institutional Mistakes: In the hunt for yield, institutions loaded up on alternatives like hedge funds and private equity, misreading early and late cycle dynamics (27:04-29:03).
• Retail Risk: As institutions exit, these illiquid assets are being marketed to retail investors—a warning signal, per Higgins (29:13-30:40).

“What people don’t realize is that this is not the beginning of a cycle. This is the end of the cycle.”
—Mark Higgins (28:35)

• Private Credit Concerns: Higgins highlights questionable accounting practices and the recycling of risky assets, with inflated returns driven largely by dubious valuations (31:55-34:53).

9. AI and the Future of Financial Credentials

• CFA Charter and AI: While AI passing the CFA is impressive, Higgins notes the value of the credential is more about showing commitment and work ethic (35:34-37:23).
• Most Valuable Education: Independent research and reading were most transformative for Higgins—notably more so than formal education (MBA) (36:31-37:23).

10. Book Recommendations & the Role of Trade Policy

• Top Book Recommendation:
  • The Great Inflation by Robert J. Samuelson—as the most timely, relevant resource (37:40).
• Tariffs Past and Present: Higgins is cautious about escalating trade wars, citing historical precedents that led to global catastrophe, with some relief that recent tariffs have not invoked global retaliatory cycles (38:59-40:06).

11. Agency Conflicts in Institutional Investment Consulting

• Consulting Industry Evolution: Originally emerged to counter poor bank performance, but has since become similarly conflicted due to business incentives (40:21-43:19).
• Case Study: Nevada PERS outperformance is used to argue that simpler, lower-cost approaches often outperform complex, fee-heavy portfolios.

“Consultants should be moving institutions and trustees to less complex, lower cost portfolios. And they're going in the opposite direction.”
—Mark Higgins (42:53)

12. Simplicity and Sound Investment Practice

• Simple Portfolios Work: 60/40 and TDFs support better investor behavior and superior outcomes—complication often only adds cost and risk (43:19-44:51).

13. Big-Picture Optimism after Immersive Research

• Changed Outlook: After intensive research, Higgins shifted from pessimism to optimism, realizing the US has repeatedly weathered major crises and emerged resilient (46:02-49:21).

“Every generation thinks the whole world’s going to fall apart after they leave... And there’s something about this country that... is more resilient than people often think.”
—Mark Higgins (48:07)

• Balanced Awareness: Acknowledges severe problems—debt, monetary failures, politics—but believes in the endurance of American institutions and culture.

Notable Quotes & Moments

• On “unprecedented” crises:
  “The March 2020 panic almost looked identical to the July 1914 panic.” (06:14)

• On persistent human error in markets:
  “Just because something worked in the past, it worked under a different set of conditions... We're in the late stage of the cycle. Those rules don't apply anymore.” (44:51)

• On consulting conflicts:
  “Being a little different in terms of your asset allocation, picking and hiring and firing active managers and adding alternative asset classes... there’s evidence... that it isn’t [adding value].” (41:24)

• Personal Moment:
  Mark’s cross-country train trip with his son and family, blending financial history with personal bonding (08:16-09:42).

Timestamps for Key Segments

• Mark Higgins’ Financial History Origin Story: 05:52–07:22
• Reassessing Hetty Green: 03:32–04:58
• On Hamilton and the Debt: 10:11–12:21
• Central Bank Independence Parallel: 13:30–16:49
• Active Management’s Persistent Struggles: 18:46–20:54
• Debt and Reserve Currency Risks: 22:46–24:40
• Current Asset Bubbles—Private Markets Warning: 27:04–31:16
• Accounting Tricks in Private Credit: 31:55–34:53
• AI and the CFA Credential: 35:34–37:23
• Top Book Recommendation: 37:40–38:26
• Institutional Agency Conflicts: 40:21–43:19
• Big-Picture Optimism: 46:26–49:21

Final Takeaways

Mark Higgins’ perspective is clear: understanding decades—or centuries—of financial history isn't a quaint academic exercise, but a vital practice for informed investing and sound policy. Many of the challenges facing investors and policymakers are not new; recurring behaviors, incentives, and political dynamics can be traced throughout financial history. Simplicity, skepticism of “new and improved” high-fee products, and broad context are sound defenses amid cycles of confusion and exuberance.