There is a strong argument and comparison that can be made between the gilded age of the 1920s and the past 30 years of our nation’s economy. The 1920s was an era of unprecedented growth and economic prosperity. President Hoover stated “a chicken in every pot”; this was true, and our nation was in the midst of a great economic upturn that some claimed would never falter. This was also a time when there wasn’t a hint of regulation and a national sentiment of small, non-intrusive government in the marketplace.
That era gave way to one of the most devastating eras of this country’s history: the Great Depression. The nation saw itself continuing down the slippery slope of faulty, unregulated and mismanaged business and banking, which ultimately brought forth the depression of the 1930s.
It wasn’t until President Franklin D. Roosevelt and the New Deal that created a safety net and began setting up commissions and boards like the National Labor Relations Board to oversee businesses, banks and the stock market, which gave the American public the assurance that the economy would be more stable and would not allow the mistakes of the 1920s to recur.
The United States would not feel a full recovery until the middle of World War II, and I believe that it was the war that actually lifted us out, but it was the New Deal that gave us solid footing going forward and not reverting back.
The past 30 years, a movement that seems to be a mirror image of the sentiment of the 1920s has been gaining momentum and followers within certain political establishments. Deregulation of business and banking and also the deterioration of our safety net has been the focus of the current minority movement. This deregulation, while it did spur the greatest economic run of the past 50 years, just as it did in the gilded age of the ’20s, also spurred the economic Great Recession we are in today, and if it wasn’t for the little regulation and safety net we have now, the Great Recession would have been much deeper and much greater.
So let’s learn from our history and not buy into the story that regulation inhibits growth, but finally realize regulation prohibits collapse.