On Thursday October 24th, 1929, the American stock market crashed, and crashed again on the 28th, only to crash even more the next day. In a few days, massive portions of the American economy were wiped out, and investors, both big and small, went down with it. It was the beginning of the Great Depression. Nobody thought such a thing could happen, investing had become "scientific" and "modern," it was foolproof. But down it went.
79 years later (and a time or two in-between), the stock market crashed again. Had we learned nothing from that terrible week 80 years ago? Yes, actually we had. Despite efforts to rip it all down, much of the New Deal reforms instituted by Franklin Delano Roosevelt and his administration in the 1930's remained in place. There was the FDIC to insure depositors' money, and a smarter Federal Reserve that knew action needed to be taken and acted accordingly. Bush instituted tax rebates, Obama passed a stimulus bill.
There were also other government programs that helped keep the whole economy from falling apart, programs that have different primary purposes, but also act as an almost permanent stimulus. Take Social Security, for example, instead of the elderly and disabled living out their lives in dire poverty (which you may or may not care about), they now get modest monthly checks which they go out and spend. The banks may not be lending, but those government checks go out every month. Even the armed forces met its recruiting goals, for the first time in eons, taking unemployed men and women off the streets.
You may not like some of these things, Social Security, or the Army, and you certainly didn't like the big bailouts of those Wall Street firms, but the fact remains that something had to be done and something was done. It ain't over, but it's looking like the worst of it is. You can thank the following people, some of whom, I guarantee, you won't want to thank at all: FDR, Hank Paulson, Ben Bernanke, George "Dubya" Bush, Sheila Bair, Barack Obama, Barney Frank, and a host of others, who muddled through this thing and pulled our collective chestnuts out of the fire. But didn't some of those people get us into this mess? Probably, but it could have been worse - much, much worse.
