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Black Tuesday II

by Robert S. McElvaine on Oct 1, 2001

Robert S. McElvaine

“Black Tuesday” has long referred to events that took place in lower Manhattan on Oct. 29, 1929 — the largest stock market crash ever experienced. Now that long ago Great Crash in the heart of the world’s financial center has been superseded by a far worse and all-too-literal Great Crash only blocks away on another Tuesday.

People picture the onset of the Great Depression of the 1930s with vivid images of ruined investors jumping out the windows of New York’s skyscrapers. Those stories were untrue. How appalling it is to realize that this myth of 1929 became a horrifying reality in 2001.

Pearl Harbor is the historical analogy heard most often  since the attack on the World Trade Center, but a comparison of the Black Tuesdays of 1929 and 2001 is equally useful. Both produced a level of fear that has been reached in only a few other times in American history.

“The only thing we have to fear is fear itself,” Franklin D. Roosevelt affirmed at his inauguration in 1933 —  “nameless, unreasoning, unjustified terror . . . .” This was far from the whole truth, given the desperate condition of the economy. But fear itself was an important part of the problem of massive unemployment and low consumption. The same is true today. Fear itself is hardly the only thing we have to fear, but it is a major force in itself.

Even if we can get beyond unreasoning terror — and most of us will — there may be a more subtle but much more significant psychological consequence of the disaster.

Nothing was lost, John Kenneth Galbraith has said of the  Great Crash of 1929, “but money.” Many Americans emerging that year from the decade in which a full-fledged culture of consumption had first developed would have been likely to respond, “What else is there?” Even though we have become far more materialistic in recent decades, it is difficult to imagine anyone asking such a question in the wake of the new Black Tuesday. Far more than money was lost in the Great Crash of 2001.

The message that there are things vastly more important than money and the material things it can buy came through so loudly and clearly in the ghastly events of Sept. 11 that almost everyone heard it.

George Will has said the attack ended Americans’ “decade-long holiday from history.” So, too, one suspects, did it end Americans’ decades-long inversion of priorities and values. The modern American motto, instilled in us by advertising for most of the last 80 years, has been “More, more, more for me, me, me!” Americans have become so addicted to spending that it now takes something much larger than a stock market crash to get us to reassess our compulsions and become more hesitant to make purchases, as happened following the 1929 crash.

There was no such response to the 1987 stock market crash. No politician in recent years who hoped to be elected to high office has dared to utter the word “sacrifice.”  Even now, administration officials are incongruously urging Americans to demonstrate their patriotism through buying, not sacrifice.

Yet precisely because the Black Tuesday of 2001 is so much worse than that of 1929, it may bring about, for a time, a move toward more conservative spending, more of a community orientation, and even more of a willingness to make some sacrifices. It may take some time before the American people return to their quest for happiness through the accumulation of an ever increasing number of possessions. While this would plainly not be good for the economy, in other respects it would be a very positive development, with Americans regaining a perspective on what is truly important in life.

Perhaps the best way to see the recent terrorist attack is as a combination of Black Tuesday and Pearl Harbor. The one major break in the modern trajectory toward ever more consumption and self-centeredness was the decade and a half that began with the Great Crash of 1929 and was renewed with the impact of Pearl Harbor. People pulled together in the face of crisis during both the Great Depression and World War II.

We are presently seeing a degree of unity in the United States that has been seen only on rare occasions in our history, most notably during the “Good War” in the 1940s. This may prove to be a powerful counterbalance to the problems of a wounded economy.


Robert S. McElvaine, a writer for History News Service, is a professor of history at Millsaps College and the author of "The Great Depression."