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The stock market collapse of October 1929 was a huge turning point in American Capitalism. Klein says that the crash was the result of a bubble that was created from soaring stock prices, over leveraging (taking on debt), and overconfidence in the growth of the market. Investors had already long overinflated stock prices by the time it was too late, and the Early American Period of Public Confidence in Investment ended with a huge bang. As prices fell, public confidence did too. (Klein, 85-102) -
Following the Crash of 1929, FDR made a genuine step towards restoring the public's confidence in the market and Wall Street through the New Deal. Fohlin says that the "old" market was pushed out through FDR's new stability measures such as creating the SEC (Securities and Exchange Commission), which helped the market have a more hands on approach. These new reforms helped push transparency, accountability and stability which ushered in a new era of American Capitalism. (Fohlin, 112-138) -
WW2 set up America with Economic and social settings that made for a very impactful period in American History. Buklijas focuses on the impact of WW2 on how the government learned the importance of public health and how public programs helped the American people endure war. The functional American economy led to an age of massive population growth and expansion of the work force. Along with winning the war, the period set up America for a ripe position moving on into the 50's. (Buklijas, 43-62) -
As America geared towards its Post War Era, new issues such as the OPEC Oil crisis and inflation arose which caused unemployment to rise. These issues combined heightened the cost of living for the average American, and it started a movement that foreshadows the political decisions that would be soon to follow. Hackworth says the crisis in America left an opening for the Conservative Party that would bring in the concepts of Reaganomics. (Hackworth, 72-91) -
Following the crisis in 1980, Reagan ushered in his ideals (Reaganomics) with the intent of stabilizing the economy in a way that prioritized pure growth. Reagan had pushed for large tax cuts, and reducing government spending along with deregulation in order to stimulate the private sectors growth. Over time these changes would lead to reduced inflation and economic expansion, and it changed the way Americans view the markets and how they prioritized capital returns. (Komlos, 1-21) -
The North American Free Trade Agreement was implemented in 1994 and it unified capitalism and spread it to the unified trade zone of North America. NAFTA helped eliminate tariffs and it reduced barriers to cross border investment primarily for American companies. This helped US companies with outsourcing, and its effect increased global competition and made consumer prices fall. This change also emphasized a global marketplace model that was based on efficiency. (Marshall, 45-63) -
Starting in the 90's, the rapid growth of internet based firms created a large rise in speculative investment based on innovation and growth that was unprecedented. This cycle of investing would push market valuations to the limits for almost a decade until the prices eventually corrected after investor confidence in the sector declined. This period taught investors how speculative investment can be costly, and at a high enough scale it can destabilize the economy. (Arnold and Dagher, 1850-1871)