The Great Depression was kicked off by the US stock market crash called Black Tuesday on October 29, 1929. When news of the crash reached other nations their economies followed suit. The world’s GDP decreased by 15%.
The roaring 20’s were over. The exuberance and economic strength that followed the end of WWI had run out of steam. Herbert Hoover’s Republican dominated government didn’t want the federal government to intervene. The results were disastrous.
In 1932 Franklin D. Roosevelt soundly defeated Hoover to become the next president. He and his democrats presented the “New Deal.” Utilizing government funds to build much needed infrastructure he put Americans back to work. The 40 hour work week and child labor laws came out of his efforts to fix the economy.
The gold standard was abandoned and laws on banking regulations were written, notably the Glass-Steagall Act. The gold standard left our nation’s currency vulnerable to manipulation of gold producing nations like South Africa and the Soviet Union. The Glass-Steagall Act regulated how banks could lend money to prevent them acting recklessly. Most of the solution to the Great Depression came from banking regulations.
This gets the Captain to thinking. Why? FDR and his advisors believed the Great Depression was a manufactured event. Judging by the methods used to repair the economy they must have believed this to be the case. Economic warfare between nations is not uncommon.
It wouldn’t have been the first time. Alexander Parvis (Case Study 44) created a run on Russian banks in 1905. There was a Revolution against Czar Nicolas going on. It was unsuccessful. The attempt to disrupt the economy was aimed at corroding his support base.
Who would want to create a worldwide economic crisis? Who would benefit? One group of people who benefited was the Nazi regime. During the 20’s when times were good, no one paid much attention to the fanatical anti-Semite socialists. When the economies of the world went into a downturn their message was given a more sympathetic ear. They blamed the economic problems of the world (and their defeat in WWI) on the Jews. By 1933 Hitler was dismantling their democracy.
In the US former Commandant of the Marines Corps, General Smedley Butler addressed a House of Representatives committee in Nov of 1934. He claimed he was approached by parties interested in starting a fascist style revolution modeled after the Nazi takeover of Germany. He played along long enough to find out who was behind it and reported it to Congress. This became known as The Business Plot.
Could the Nazi’s, Communist Soviets or an unseen group behind them both created the Great Depression? If we realize history repeats itself because powerful people repeat themselves we should see similar assaults on the economy afterwards. That is in the recent past, present and foreseeable future.
The Glass Steagall Act was repealed in 1999. Congress overwhelmingly voted to dismantle the regulations and then President Clinton signed it into law 8 days later. This event is cited as one of the major causes of the 2008 Great Recession.
One of the congressional members opposed to the repeal was Representative Gary Condit (D-CA). He also voted against NAFTA and the Iraq War. He, and the rest of Congress, was taught a lesson when his mistress Chandra Levy (Case Study 33) was found murdered in a park near her flat.
Bear Stearns was the company that first collapsed in 2007 kicking off the Great Recession. Bear Stearns bond trader Lewis Raneieri, the father of mortgage backed securities, is considered to be the cause of the companies 17:1 leveraged bonds. Their failure caused investors to sue the company. Jeffrey Epstein (Case Study 7) was a friend of Raneieri (NYMag). Epstein was a former employee at Bear Stearns and remained a financial advisor though he had committed securities fraud and been forced to resign. He may have lost money in the crash. It is curious why he would have invested so much right before the crash. It is also thought the money invested was not his own. Was he playing off involvement?
Related; Karl Marx