It was 82 years ago today that a real estate bubble allowed unregulated banks to engage in WILD speculation on Wall Street.
Many people don’t know that the economy had actually been turning bad for nearly a year prior to the great Stock Market Crash of 1929. The Market had its “worst day ever” on October 28th when it lost 15% of it’s value in one day. The result of out of work people failing to make their mortgage payments. Sound familiar?
But when it happened again the very next day on October 29th, many banks lost everything. And with no FDIC to insure depositors, the people who put their money in those banks lost every cent they owned as well. No money because their deposits were not insured, no jobs because corporations weren’t hiring to sell goods to penniless customers, no unemployment insurance, no Social Security, or food stamps… all the things that have prevented our current economic crisis from duplicating the disaster of 1929. (All put in place by FDR, and all things today’s Republicans would have us do away with.)
The Republican president in office at the time tried relying on “free market solutions” to get the economy moving, which failed miserably. And by his fourth year in office, WWI veterans had camped out in front of the capitol demanding that the government pay them the bonuses they were promised ten years earlier (“The Bonus Army”).
Hoover figured out too late that it is the governments’ role to move the economy when the private sector can’t or won’t. He directed the building of the “Hoover Dam”, and construction of the “Empire State Building” began in NYC under his watch. But it was too little too late.
And now we see history is now repeating itself. How long will it take the Washington D.C. of today to learn the lessons of the past?