December 12, 1914, is not a day I have ever associated with the stock market. October 29, 1929, is Black Tuesday, commemorating the collapse of the American economy, and marks the beginning of the Great Depression. That is a date I remember.
On December 12, 1914, the New York Stock Exchange re-opened, after being closed since August 1st.
It took a couple of decades after December 12, 1914, for the government to figure out that capitalism is like a river, it can do magnificent things when controlled; left to rage on its own, it will wipe out everything in its path.
We control rivers to create sources for drinking water, generate electricity, farm fish for food, establish recreation areas, and even as a place to dump our shit.
If we didn't control and manage the largest rivers, they could destroy everything around them.
Rivers are powerful. They can be glorious and frightening.
Capitalism will also destroy everything in its path, too, if left to its own devices. When capitalism is controlled, it flourishes and creates amazing benefits for everyone around it. Just like a river.
When capitalism is left to its own devices, it will destroy itself and everything around it.
When, in the 1930s, the government began to regulate business, capitalism suddenly began to operate effectively, efficiently, and with dramatic benefits for humans throughout the land.
By the 1950s, the government had managed capitalism to such an amazing degree that the rich were richer than they could ever had imagined, and the working class became the middle class, and the government used its regulation of business to create the suburbs. The suburbs became the backbone of America's new, wealthy culture.
The suburbs did not appear out of nowhere, were not created in a vacuum. The suburbs were a remarkable feat of social engineering.
Social engineering, powered by the regulation of capitalism, is as American as apple pie, baseball, and a crooked justice system.
From the moment we began our extermination of the aborigine population of North America, right down to last night's loss by the Dallas Cowboys, Americans have benefited from some of the most innovative feats of social engineering. How? The regulation of the economy.
In 1980, Americans voted to end our way of life and turn our lives over to the pursuit of unbridled capitalism: a system that has always failed. "Deregulation"!
Our economy looks more like 1914 than 1964, and this is bad for all Americans.
Call me a socialist if you like; I will not argue with you.
But look at the history of the 20th Century and tell me if we were more succeswsful as a civilization with regulation or without.
December 12, 1949
On the first day of trading since the New York Stock Exchange (NYSE) reopened in November 1914 after being shut down due to the start of World War I earlier that year, the Dow Jones Industrial Average suffers its worst percentage drop (24.39 percent) since it was first published in 1896.
American officials had decided to reopen the NYSE after the longest-ever suspension of trading because it was thought that bond trading, albeit with a set of restrictions designed to safeguard the American economy, could help raise money for the war effort. The precipitous fall of the Dow Jones Industrial Average (DJIA), the most important of various stock indices used to gauge market performance, indicated the risky nature of business during the first months of war, when nobody knew exactly how long the war would last or what role the U.S. would eventually end up playing in the conflict.
Despite the tough economic climate that would continue throughout the war—including a 40-percent drop in the DJIA from late 1916 to early 1917—World War I was a clear turning point in the realm of international finance. New York would replace London as the top investment capital and the New York Stock Exchange would become, for better or for worse, the undisputed barometer of the world's economies.
Stocks tank as NYSE trading resumes
Can I get you a cuppa . . .
Kyle G. Brixton
Kyle G. Brixton