QUESTION: I am writing a article about how screwed up wall street is

question / pregunta: 

I am writing an article about how screwed up Wall Street is and I want to start with a comparison to a crash in history, prior to 1929. Which crash most resembles 2008?


In looking analogies previous crashes or "panics" as they used to be called, you might want to consider what factors were involved in the 2008 crisis. Conventional wisdom - which it is important to remember is useful as a guide but should always be subject to questioning as you research - seems to be that it was a combination of a real estate price "bubble," which became coupled with complex financial investment structures (derivatives) that encouraged, demanded even, more and more mortgages to be issued. A "vicious cycle" was created as credit was extended recklessly. Other factors include centralization, leading to problems not unlike monopolies and cartels, increased integration of global markets due in part to technology, and the rollback of regulatory structures in the USA. There's a lot going on there, which I would suggest you need to get some handle on in order to figure out which historical analogies are apt.

If you are outside of a library, Google is a useful research tool. One trick you may find handy is using a source limiter. To get only information from academic sources, you can add [] to your search (not using the brackets). I tried [real estate speculation financial crash], and looked through a few pages of results. You can vary your search terms as you continue to shape your research, and try limiters such as [] for government documents, or [] for organizations. You will notice that the latter gives you sources ranging from Wikipedia to the World Bank.

A New York Times article from 2008 drew comparisons to the Panic of 1873. 1873 is an interesting case, since that era can be seen as the first panic of the modern industrial age, and may be a starting point in the story of regulation that came into play at the turn of the last century, peaked midcentury, and was gradually reduced over the past 30 years. Again, this is something of a "conventional wisdom" view that can help guide research but shouldn't be taken without question.

Panic of 1837

I understand your question to be whether there were any financial crises in the United States before the Great Depression of 1929 that parallel the U.S. subprime mortgage meltdown of 2008.

Nineteenth century financial crises in the U.S. were cited in 1837, 1857, 1873, and 1893. The 20th century saw a 1907 crisis. While each 19th century financial panic had its own root cause, the 2008 crisis has many similarities. See historical perspectives on the crisis. See also Panic on Wall Street which provides a survey of the 12 financial crises which have gripped the American economy from the post-Revolutionary era to the 1960's.

A video of history professors discussing the Panic of 1837 and other financial meltdowns and how these relate to the 2008 crisis is available for viewing. There are several books about the Panic of 1837. A recently published book, America's first Great Depression : economic crisis and political disorder after the Panic of 1837 by Alasdair Roberts, compares the country's current economic recession to the 1837 financial crisis.

Sources found from Google: "us financial crisis history"and Worldcat: "panic of 1837"

Axamei provided a useful

Axamei provided a useful alternative search string - much better for broad results that the search terms I used, which were based on the idea of real estate speculation. You can see in the comparison how your choice of search terms can be shaped by your theories, and how the results of different searches become "comments" on those theories.

If you are able to get to an academic or public library with access to online collections of journals, you can get more specialized views, and also filter out a lot of the "noise" of the wider web. Of course, you also lose some of the alternative/outsider ideas that don't find a home in the academy.

A good general use database that many public and most academic libraries have is Ebsco's Academic Search Premier. Using the search terms ["united states" financial crisis history] in the basic search box there, and limiting results to those available in full text and appearing in peer-reviewed journals (to get rid of newspaper editorials, mostly), yielded 97 results, which is a small enough number to be able to browse through for things that look relevant. For example, the following looked worthwhile:

Hummel, J. (2011). Ben Bernanke versus Milton Friedman The Federal Reserve's Emergence as the U.S. Economy's Central Planner. Independent Review, 15(4), 485-518.

Sylla, R., Wright, R. E., & Cowen, D. J. (2009). Alexander Hamilton, Central Banker: Crisis Management during the U.S. Financial Panic of 1792. Business History Review, 83(1), 61-86.

Westley, C. (2010). The Debate over Money Manipulations: A Short History. Intercollegiate Review, 45(1/2), 3-11.

Hansen, L. L., & Movahedi, S. (2010). Wall Street Scandals: The Myth of Individual Greed. Sociological Forum, 25(2), 367-374. doi:10.1111/j.1573-7861.2010.01182.x

Wilkerson, C. R. (2009). Recession and Recovery Across the Nation: Lessons from History. Economic Review (01612387), 94(2), 5-24.

Kotz, D. M. (2010). The Final Conflict: What Can Cause a System-Threatening Crisis of Capitalism?. Science & Society, 74(3), 362-379.

This is a sample from the first 20 of the 97 results. Each of the results includes an abstract (summary) of the article to help you decide if you want to look at the whole thing.

Google has its own alternative to the scholarly databases, call Google Scholar. Using the above search string in gets over a million hits. Many of these will not be accessible outside of a library that subscribes to the source material, but some - such as the first result, a National Bureau of Economic Research working paper - will be freely accessible.

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