[Ed: Marie wrote this for DailyKos and has given me permission to post it here for The Left Coaster.]
On October 19, 1987, stuck in a classroom teaching accounting, I received a message that I had an emergency call. You know the sort of message that makes your heat skip a few beats. It was a call from a friend and as I made my way to the front office to take her call, I imagined all sorts of dire things. It only took a couple of words from Lisa for me to appreciate that she was in a state of panic, but many more before I understood what it was about. More still to understand why she was freaked.
Until she called me, I had not heard about the stock market crash that day. As I'm not a stockbroker, market analyst of even a investment counselor, how the hell was I supposed to have any insight about this event. But Lisa was desperate and I was the only person she knew that had any business experience.
My other stumbling block was why the hell she was calling anybody about what happened that day on Wall Street. She had no investments and was barely past the stage of writing rubber checks. It took a while to get there but finally she did. She was afraid that this was October 28-29 all over again. The signature event that led to the Great Depression that we'd heard about our entire lives from our families and teachers. As if that was the catalyst and not merely a symptom of a pre-existing conditions.
That was a question I could answer. No, the economic conditions in 1987 were not like those in 1929. The economy may not be robust but hardly as weak as it was in 1929 and years just prior to it. Plus, all those safeguards that FDR put into place as part of the New Deal to preclude another 1929 were still mostly intact. Not that Reagan and even Carter hadn't been chipping away at them. The S&L deregulation was part of that chipping away and it was turning into a big mess as it was bound to do. So, my guess best was that Wall St. was going through a market correction. As long as the markets and public didn't over-react, because depressions do have a psychological as well as financial component, this shouldn't have any widespread or long lasting impact on the general economy. That was all she needed to hear. Panic gone, she could resume her normal activities. I didn't tell her that I'd been winging it. Mixing a little knowledge with a heavy dose of speculation and a teaspoon of sugar.
Then a funny thing happened in 1999. While Democrats were busy defending the Clenis, he quietly signed the repeal of the Emergency Banking Relief Act of 1933 (commonly referred to as Glass Steagall). As if his other deregulation efforts hadn't been damaging enough (energy and media deregulation, anyone?) So, now it begins all over again. Fed bends rules to help two big banks - CNN Money
And we are only at the beginning and not the end. History echoes and never repeats. The conditions today are still different from those way back then. Not better, could be worse, could be more easily managed because we've learned a lot about economic medicine since then. Then again I thought we'd learned something from the Vietnam War and was completely wrong. So, the road ahead is rocky and filled with lots of potholes. Wonder how much the gay, guns and god voters are going to enjoy the ride.