Today marks the 94th anniversary of the Wall Street Crash of 1929, one of the most significant financial events in American history.
One of New Jersey’s most prominent progressive Democratic activists, Lisa McCormick, drew a compelling parallel between today’s economic conditions and those that existed prior to the Wall Street Crash of 1929.
She is most widely known as the 2018 insurgent primary election challenger to Senator Bob Menendez, who voted for the 1999 Gramm-Leach-Bliley Act, which essentially repealed the Glass-Steagall Act.
During her campaign against Menendez, McCormick raised that vote as a key issue and said the lawmaker was advancing another dangerous deregulation scheme.
“U.S. Senator Robert Menendez is trying to unwind the safeguards implemented to protect $2.7 trillion in money fund assets, along with the entire global financial system,” wrote McCormick in an essay published on March 22, 2018. “While rolling back regulations is a gift to billionaires and giant banks, consumers stand to lose everything in another economic disaster like the one Menendez helped trigger in 2008.”
McCormick said, “Menendez voted in 1999 to repeal the Depression-era law enacted by President Franklin Roosevelt and Democrats in Congress to stop bankers from gambling with other peoples’ money” and was at the time sponsoring legislation enabling “persistent financial industry assault on systemic protections.”
The Wall Street Crash of 1929 was a pivotal moment in history, triggering a global economic depression that lasted for years. On its 94th anniversary, it is important to remember the lessons learned from this event and how it shapes the financial world today.
The crash was caused by a number of factors, including over-speculation in the stock market, excess borrowing, and an economic bubble that eventually burst.
On October 29, 1929, the New York Stock Exchange witnessed a catastrophic collapse in share prices, leading to widespread panic and economic turmoil.
The Great Depression that followed had a devastating impact on millions of people around the world.
Unemployment soared, businesses closed, and people lost their homes and savings. It took years of government intervention to pull the global economy out of this downward spiral.
The Crash of ’29 also had a lasting impact on financial regulation and investor behavior. In the years following the crash, the U.S. government introduced several regulatory reforms to prevent such a catastrophe from happening again.
These included the creation of the Securities and Exchange Commission (SEC) and the Glass-Steagall Act, which separated commercial and investment banking.
The crash also highlighted the importance of diversifying investments, managing risk, and avoiding the pitfalls of excessive speculation. In the years following the crash, a culture of caution and risk aversion prevailed among investors.
“Today, we face many of the same economic challenges that existed prior to the Wall Street Crash of 1929,” said McCormick. “It is important to be vigilant to prevent history from repeating itself.”
“We must ensure that our financial system is well-regulated and that investors are protected,” said McCormick. “IWe must also promote financial literacy and education so that individuals and institutions can make informed decisions and avoid speculative bubbles.”