The Stock Market: Party Like It's 1929!
INTRODUCTION: SIMILARITIES AND DIFFERENCES BETWEEN 1929 AND 2020 Gamestop! Short squeeze! Bitcoin! Options! IPOs! SPACs! Hydrogen trucks! Tesla up 800%! Market valuations in bubble territory. And my favorite “blue sky” stock - Virgin Galactic. At first sight, there was nothing in 1928-1929 similar to the impact of Covid-19 on the economy. Actually, there was. In 1927, Ford closed down his entire company to retool for a new line of cars. 70,000 people were thrown out of work; many more at suppliers also lost their jobs. But everyone knew that Ford would start up production again. Ford began production in 1928; 1929 was a record year for auto production. But in late summer and early fall, inventories began to build up. Both periods were preceded by speculation in real estate. Both ended badly, closing off an alternative area of speculation. Both periods (1920s and 2010s) saw an increase in income inequality. Large parts of the labor force, particularly farmers in the