Twenty-two years, I can't believe it's been 22 years. The great stock market crash of 1987 — when, in a single day, the Dow lost nearly a quarter of its value.
Think about that: That would be like the Dow crashing 2,500 points today.
I was a reporter back then on Wall Street, covering the panic. And panicky investors who predicted it would take years to recover. And politicians who demanded sweeping regulations or we'd never recover.
And I covered President Ronald Reagan, who didn't seem to get the panic or the need for all these rules to address the panic.
Some said that proved how clueless he was. And when Reagan famously said of the sell off, "stocks go up, stocks go down," that really proved it. And when he refused sweeping reforms, opponents say that really, really proved it.
But what Reagan was saying was all the regulation in the world can't stop bubbles, or extremes.
We could address the malady of the moment... like something called portfolio insurance back then, which we did. And maybe stagger sell-offs to try and cool things down in the heat of a meltdown, which we did too.
But the big things, the all-sweeping things that Congress wanted to do, Reagan would not do. Because he said there'd be other sell-offs for other reasons. Such are markets, such are extremes, such is man.
Ronald Reagan was right then. I think his message is right now.
You don't need a consumer commission to tell you Congress can no more regulate bubbles than it can suddenly pop its own spending ways.
Reagan got that then. Do we... now?
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