If History Repeats, At Least We’ll Be Surprised Again

I recently completed reading the book 1929 by Andrew Ross Sorkin. In October of 1929, the American stock market crashed and the Great Depression began. In 1929, the stock market was at an all-time high. Today, the stock market is again around an all-time high. The head of JPMorgan Chase has been quoted as saying, “Looks like they’re entering bubble territory.” The head of Goldman Sachs describes what’s happening as “investor exuberance.” Citigroup’s head calls it “valuation frothiness.” The International Monetary Fund has said, “Risk asset prices are well above fundamentals.”

Read this well-written book for yourself and draw your own conclusions. My take is that the main difference between 1929 and 2025 is that in 1929, for all practical purposes, the stock market and the banking industry were not regulated. With all due respect to human nature, there is a reasonable argument that morality is directly related to transparency. If we are being watched, we are more likely to behave. As a longtime attorney and financial corporate board member, yours truly has observed no shortage of federal regulations that are poorly written and counterproductive. Many of them have primarily stimulated the economy of attorneys and CPAs.

As cynical as I am about federal regulations, Sorkin has done a credible job in describing the results of lack of regulation in 1929. The “trust me but don’t bother me” mentality of the Roaring Twenties resulted in a burlesque morality that injured millions of investors, large and small. Regulation of some type, even if sometimes dumb, has to date prevented another subsequent crash as catastrophic as 1929.

Are there movements at present that are troubling? To this aging prairie dog, yes. There are cryptocurrency companies asking the government for permission to start their own banks. The present administration is crypto-friendly, as a certain member of the executive branch and his family are deeply involved in crypto. Wide reporting suggests the President’s sons and family-controlled entities have benefited from billions in industry investment, including one major industry figure who recently received a presidential pardon. These “banks” would not be regulated under the same set of rules as traditional banks.

Self-dealing and lack of regulation are what kicked off the Great Depression. In 1929, many small investors were gambling their hard-earned money with the wrong people in an opaque financial industry. A new generation of wolves are again on the prowl. History has not yet repeated itself, but there are those among us who are betting we don’t know or care about history. History only repeats itself if we don’t know it or remember it.