Black Tuesday, 79 Years Later
Today marks the 79th anniversary of Black Tuesday.
For many Americans with a long memory, October 29, 1929, was the opening act in what would become the Great Depression.
Black Tuesday was actually one of two horrific trading days in a stock market that had begun falling over a month earlier. After peaking in September at 381 points, the Dow Jones Industrial Average began its descent, finally plunging 12.8% on Black Monday (Oct. 28, 1929) and another 12% on Black Tuesday. The domino effect kept stocks in a freefall until the market finally hit bottom in July 1932.
The stock market crash didn’t just affect stockbrokers. It rocked the world of nearly every American in a period lasting from the late 1920s to the 1940s, wiping out life savings, contributing to massive unemployment and causing the collapse of banks and businesses. During the darkest days, 15 million Americans, or one-quarter of the population, were unemployed, and by early 1933, more than 5,000 banks had failed.
Franklin D. Roosevelt’s New Deal reforms, launched in 1932, were meant to lift the country out of the Depression through government intervention. The New Deal reforms included a series of banking reform laws, emergency and work relief programs and farming programs that helped pull an ailing economy off life-support.
“In the short term, New Deal programs helped improve the lives of people suffering from the events of the depression. In the long run, New Deal programs set a precedent for the federal government to play a key role in the economic and social affairs of the nation,” according to the Library of Congress.
There are many differences between the economic conditions in 1929 and those of today, and most economists doubt the challenges we now face will rival those of the Great Depression. Still, the 79th anniversary of Black Tuesday seems like a fitting time to note some striking similarities. The timing of the economic crisis, then and now, followed years of a roaring bull market and an equal dose of “irrational exuberance” among investors. A rising tide of bank failures, increasing unemployment and the loss of life savings to a falling stock market all sound like they could have been taken from the pages of a school history book.
What lessons do you think we can learn from the pages of history? What role should government play in the lives of its citizens?
