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Black Thursday: The Three Days That Broke American Capitalism
Audio is available on Spreaker — see link below.
On October 24, 1929, sell orders overwhelmed the exchanges and Black Thursday ignited a collapse that would destroy a third of the money supply and plunge millions into poverty. This chapter traces the margin calls, the bucket shops, the Federal Reserve's fatal contraction, and the deflation spiral that turned a stock market crash into the Great Depression.
Audio is available on Spreaker — see link below.
It's October twenty-fourth, nineteen twenty-nine. The opening bell hasn't been ringing for long when the sell orders start arriving faster than the clerks can process them.
To understand what broke in October nineteen twenty-nine, you need to understand what was running in the years before it. The nineteen twenties were a period of genuine prosperity.
October twenty-fourth. Then October twenty-eighth.
This is where history gets its sharpest edge. In the year following the crash, the Federal Reserve reduced the money supply by two and a half percent.
Falling prices sound like good news if you're a buyer. They're catastrophic if you're a debtor.
Franklin Roosevelt took office in March nineteen thirty-three with a banking system on the verge of total collapse. His first act was a bank holiday, shutting down the system long enough to stop the panic and implement emergency stabilization measures.
The stock market did not recover to its nineteen twenty-nine levels until nineteen fifty-four. That's twenty-five years.
Here's what makes nineteen twenty-nine genuinely instructive rather than just historically interesting. In two thousand eight, the patterns repeated.
The nineteen twenty-nine crash sits at the center of American economic history for a reason. It's the event that proved laissez-faire capitalism could generate crises capable of threatening the system itself.
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