Money Talks: Don’t Forget The 1929 Crash

0:09Felix Salmon: Hello, and welcome to Money Talks from Slate Money, the show where we talk to the most interesting people in the world about the most interesting things that have ever happened. I am Felix Salmon of Bloomberg. I'm here with Elizabeth Spires, who writes for the New York Times, nor man of other places. Hello. And this week we have the one and only Andrew Ross Sorkin.

0:34Andrew Ross Sorkin: Andrew, welcome. Thank you for having me. I'm not a total first-time caller, long-time listener, because I think I've been on this show, but it was a long time ago.

0:42Felix Salmon: It's been a minute.

0:43Andrew Ross Sorkin: That's what the kids say.

0:44Felix Salmon: I feel like we may have had you on to Slate Money Goes to the Movies years ago, or we may not. We may have just had you on to talk about news. Because you have this day job, right? You do cover the news. I do. That's part of the gig. You run this thing called Deal Book at the New York Times, and you're also on the telly. On the tube, as they say.

1:03Andrew Ross Sorkin: This is all legacy media, folks. It's all legacy media.

1:06Felix Salmon: But now this is the real news of the day. You are being dragged, kicking and screaming into the 21st century, which then there's this amazing new technology that we have in 2025 called The Book.

1:18Andrew Ross Sorkin: So you've decided to write a book. Right. Just when people's attention span has got into the TikTok era, I've decided to go hard on the book. Yes.

1:26Felix Salmon: You are rocking like it's 1675.

1:29Elizabeth Spiers: Ever the contrarian.

1:31Felix Salmon: And your idea of high tech is to write, how many pages is this book? Like 100 and some?

1:36Andrew Ross Sorkin: I think with the end notes, it gets closer to 600. But it's a beach read, folks. It's a beach read.

1:42Felix Salmon: Does that mean I don't need to pick it up until like June?

1:45Andrew Ross Sorkin: No, it just means that you're going to have a hell of a time flipping the pages and you're not going to be able to go to sleep.

1:50Felix Salmon: It's a page turner is what it means.

1:53Elizabeth Spiers: It was described as spellbinding in the blurbs.

1:55Felix Salmon: Someone in the blurb called it spellbinding. So we ought to talk about

1:59Andrew Ross Sorkin: the book. What is it called, Andrew? The book is called 1929. And it's the story of what ultimately happened in the financial crash and ultimately what turned into the Great Depression. And for me, it was really an effort to tell it a little bit differently than you've ever read about it before. I think a lot of people obviously know about that period and know something very bad happened but i had never seen or read a book that sort of had the texture of the kind of narratives that i always loved so i love den of thieves and barbarians the gate and you know so many of the sort of you know rich character driven narratives and so i've spent the last eight years going back in time in the archives to try to reconstruct really what happened who were the actual players what were they saying to each other who was sleeping with who all that kind of stuff we are

2:46Felix Salmon: going to find out who was sleeping with who and who said what to whom in this book and also in this podcast. We are devoting this whole podcast just to 1929 by Andrew Ross-Lawkin. All of that is coming up on Money Talks.

3:07Felix Salmon: Okay, Andrew. Yes, sir.

3:09Andrew Ross Sorkin: This is a TikTok, as they call it. Yes, that's what they call it. The Journalista. They call it a TikTok. A fly on the wall account.

3:17Felix Salmon: you were the fly on the wall you weren't even born yet but you are the fly on the wall yeah and you've decided that notwithstanding the fact that this was almost a century ago you're going to write a tiktok style account of the great crash and the great depression

3:31Andrew Ross Sorkin: is this something the world needs so i think obviously the answer is yes but i think my answer for why yes is different than i thought it was when i started this project eight years ago I thought the answer was yes, eight years ago, literally just for the purposes of history, meaning I thought it was just necessary that we actually knew who the players were, what they said to each other, where they were, what were the moments, what were the true inflection points in these conversations? Because I'm somebody who believes that even though we talk about these large economic forces and we oftentimes talk about systems and numbers, it's really the people who make these decisions that change history.

4:08Andrew Ross Sorkin: And so if you could actually get behind that and get into the gray of it all, it might actually change our perception of what happened in that history. As I worked on the project, the parallels with now, which was not something I was really even thinking about when I first started this, became more and more apparent and almost eerily so. And so today I would say not only hopefully do you love it as sort of a rollicking read and a way to understand history, but maybe more importantly, I think you're going to see some things and go, ah, maybe we have to worry about this. Maybe we have to worry about that.

4:42Andrew Ross Sorkin: And so I'm hoping that folks both on Wall Street and maybe in Washington take some lessons away from it as well.

4:47Felix Salmon: So if Scott Besson found himself with enough time on the beach to read this book, what would be the main lesson that he drew from this? What would you be like shaking this book in his face and saying, look, you have to pay attention to this and this is what you need to do or not do?

5:02Andrew Ross Sorkin: I think you'd say to yourself that every crisis, and I think this crisis in particular sort of encompasses the issues maybe more than any other financial crisis, is typically a function of one thing. It's leverage. It's too much credit. It's too much leverage in the system. And I think what I would say to him is, do you think you really know where the leverage is today? Because one of the things that's, I think, changed in this new world we live in and this post-financial crisis 2008, of course, is that the leverage has just shifted completely. It's no longer sitting in the banks the way we thought.

5:35Andrew Ross Sorkin: It's now living in this private credit universe that we really can't measure. And the truth is that the private credit universe that we can't measure is still as connected as ever back to the bank. So if you thought somehow that it had like literally moved off the balance sheet and doesn't really matter anymore, that's not really true.

5:51Felix Salmon: That's what we discovered in like 2008, right? We were like, oh, all the people who originated the subprime mortgages, they moved the mortgages off their balance sheet to buy-sided investors who were taking risk with their eyes open, therefore there's no risk. It turns out there was a lot of risk.

6:08Andrew Ross Sorkin: Right. And so today I'd say, look, a lot of that risk sits inside of these private credit vehicles that are run by, you know, whether it's Blackstone or Apollo or KKR or Blue Owl or any number of institutions. But the truth is that all of those funds have liquidity lines back to the banks. And so the idea that somehow we've somehow, you know, outsourced credit and the risk, I'm not sure is totally true. So I tell Scott Besson, pay attention to that. And I'd probably also tell Scott Besson, pay attention to transparency. I think that was also one of the lessons, by the way, of 2008, but also of 1929.

6:45Andrew Ross Sorkin: There were no rules, by the way, in 1929, like literally no rules, no SEC, no insider trading rules, no disclosures. In fact, a reader who got an early copy said to me, did you ever have a chance to read some of the prospectuses of the companies at that time. And I said, prospectuses, you'd be lucky if there was like a leaflet that they would like hand out on the street. Literally, and that's by the way, what they would do if they did anything at all to sell you a stock.

7:09Felix Salmon: There was no S1 filings in 1929.

7:12Andrew Ross Sorkin: None of it. And so here we are in an era, by the way, where Donald Trump is saying, you know what, actually, we don't really need quarterly earnings reports anymore. I think we'd be better off only doing that twice a year. I would probably advocate, I might rethink that idea.

7:25Elizabeth Spiers: You talk in the book a lot about investor pools in the early days where it's basically a bunch of guys calling their friends and saying, I'm going to give you a discount on these equities. And there is no prospectus, no regulation around it. Do you see any parallels with the private credit market now? It's certainly more heavily regulated than that was.

7:44Andrew Ross Sorkin: It's more regulated than that. I'll tell you where I absolutely see it. I see it in crypto. A crazy story that happened to me earlier this year. So I was on TV in January with Larry Fink. He made a joke on TV. We were talking about Bitcoin, about how there should be a Sorkin coin. Literally two hours later, there was a Sorkin coin. No joke. And it was starting to, and literally it's going up and up, millions of dollars of value. It's wild. But the crazier part is somebody texts me, or actually I should say DMs me on X, formerly Twitter, and invites me into a group called Sorkin coin. Now in this group, they are literally doing what they did in 1929.

8:21Andrew Ross Sorkin: They're saying, you go in for half a million bucks. then I'm going to bid it up to, you know, another 800 ,000. Then you're going to bid it up. Then I'm going to bid, I mean, and all of these people are making these plans. I mean, as insider trading goes, this is what insider trading is. And then of course, they're going to pull the rug. This is the digital version of what was happening in 1929 with what was back then described as investment pools. So yes, I worry about that greatly.

8:45Felix Salmon: And in 1929, as we know, this was legal. In fact, It remained legal in derivatives up until the 1980s. This private group on X that you were inculcated into, was that legal?

8:58Andrew Ross Sorkin: I mean, technically, from what I can gather, nobody was arrested. I watched all this play out and was a little bit in shock about it. At one point, someone in that group tried to reach out to one of my sons. I have two 15-year-old twin sons. And they were offering my kids like$50 ,000 worth of quote-unquote Sorkin coin so that they can then say that like the Sorkins were invested in the coin. And of course, I'm calling my boys saying, you guys, you cannot talk to these people. Do not reply to these people. We're all going to go to jail. We're going to be in court for the rest of our lives. I beg you.

9:30Andrew Ross Sorkin: And of course, my son Henry says, Dad, I'm leaving a lot of money on the table here. But that I think is very 1929-ish. How about that?

9:41Felix Salmon: The book starts in the feverish parts of 1929 when stocks are going up rather than down. People are making money by buying stocks rather than selling stocks. This, spoiler alert, changes within a few chapters. Yes. But that feels closer to where we are now, where the lines are all going up and to the right.

10:00Andrew Ross Sorkin: But isn't that the human condition, by the way? Even when we know that the lines are going up and to the right and probably shouldn't be, we want more, right? We always want more. People don't know this. Or at least I didn't realize this. The stock market had gone up 48 % in 1928. So it was like free money if you were playing, especially if you're playing with house money, because at that point you could walk into a brokerage house, which was springing up like Starbucks on the corners of streets back then. You'd walk in, you'd give them a dollar, they'd loan you$10. You could borrow$10. And if the market was up 50%, think about how much money you'd made.

10:32Andrew Ross Sorkin: And this was really the first time this was ever happening en masse.

10:35Felix Salmon: The first and last time that you could ever borrow, put up$1 and get$10 to the gamble on the stock market. I mean, that is a level of leverage that was unthinkable even in like 2006, 2007 when everyone was going crazy. You know, when you buy a house, you put 20 % down and that's a house. That's not a fluffy stock that barely existed a week ago. And when you said that crashes always happen as a result of leverage, my initial reaction to that is, well, duh, if most of the stock market is owned by people who have borrowed 90 % of the money that they've put into the stock market and they can get margin calls every time the stock so much as catches a cold or sniffle.

11:12Felix Salmon: And then that causes a whole downward spiral. Like, of course, it's all going to end in tears. Any fool can predict that. But then, you know, says me to myself, that is not the world we're in. The people who own stocks right now generally own them outright. They haven't really borrowed to buy them. And sure, the companies themselves might be a little bit more leveraged, but not 10 to 1. They might have 1 to 1.

11:36Elizabeth Spiers: Well, isn't it just a matter of degree? We are seeing some developments now that sort of echo what happened there. And one is just that Wall Street would prefer that the Fed lower rates so that people can borrow more, maybe not as direct away as they could then. But there are similar dynamics still. So when you say any fool would foresee that.

11:55Felix Salmon: I don't see that at all. I feel like, you know, rates are high, rates are low is one thing. But we really do not live in a world where people are going into massive debt to invest in the stock market.

12:09Andrew Ross Sorkin: No, that's not what I've been saying. On that score, I agree with you, Felix, and I agree with Elizabeth in the following way. First of all, it's worth mentioning, back in 1929, there was a massive debate about lowering or raising interest rates. And in fact, the CEO of the biggest bank in town was sort of Trumpian in that he was desperately trying to get rates to be lower, even when the rest of everybody thought that the speculation had gotten out of hand. But the leverage piece, if you look and say, okay, 1929 fell apart because of margin loans. The leverage was in stocks themselves. 1999 was not because the leverage was in stocks themselves.

12:41Andrew Ross Sorkin: The leverage effectively was in the business model for so many of them, right? 2008, it was in subprime loans. That's where the leverage lies. Today, I'm not sure we're there yet, but we could have a debate, I'm sure, about whether you think there's too much leverage inside of this AI bubble of sorts and what increasingly looks like these circular transactions in which money is being made by magic, practically?

13:07Felix Salmon: My response to that would be what we have right now is similar to what we had in 1999, which is an equity bubble. There isn't actually much leverage. When the market crashed in 2000, people lost money if they were invested in the NASDAQ, but there was no financial crisis. You know, there was a small, shallow recession, and we just bounced. And economically speaking, it was kind of no harm, no foul, right?

13:32Andrew Ross Sorkin: So I agree with that to some extent. I think the leverage this time is more insidious because I don't think you know where it is. And I think actually when it comes to AI in particular, despite the fact that Facebook and Google and some of the big tech giants are spending real cash, right? It's real money that they're spending. The truth is, when you get down into the bowels of who's building these data centers, the energy companies that are having to build enormous amount of power, the real estate companies that are engaged in this, the construction companies that are engaged in this, there is a lot of debt embedded in all of that.

14:09Andrew Ross Sorkin: And the question is, will it all work out? By the way, I hope it will, but it probably won't, at least temporarily.

14:15Felix Salmon: You see, I like this because you guys are pessimists. nominative determinism, right? My name is Felix. I'm a happy optimist. And tell me I'm just being incredibly naive here, Andrew, but I believe in the single most important thing that came out of the financial crisis of 2008, which was to be really nerdy about it. It's Basel III. And the fact that banks really are a lot safer now than they were back then. And yes, if there is a big implosion in AI or in the stock market or in the private credit market, then they will lose money that they lent to the private credit firms. They will lose money that they lent to the people building data centers or trying to build small modular reactors or whatever it is.

14:55Felix Salmon: But the whole point of puzzle three is that they have that money to lose and it's not going to cause a banking crisis. It's not going to cause a financial crisis and we're going to be okay.

15:06Elizabeth Spiers: Well, but isn't, you know, Andrew's point about private credit that, you know, we don't actually know that. We don't know where some of this is. And, you know, when you look at the way the stock market is structured right now, you have a concentration of wealth at the top with a very small handful of players, which I just don't think was the case as much in the early aughts when we had the dot-com crash then.

15:26Andrew Ross Sorkin: I think Elizabeth is right in this regard. And by the way, Felix, it's not that I'm not an optimist. I actually believe long-term. No, we will be in a better place 20 years from now than we are today. That I believe.

15:37Felix Salmon: If we're in the worst place than we are right now, then like, you know, go help us a little.

15:41Andrew Ross Sorkin: Right. If there's a hiccup along the way, and the question is how big is the hiccup? Now, the Great Depression was a remarkable hiccup. We've not had a hiccup like that. I don't expect that we are going to have that style of a hiccup. But again, to Elizabeth's point, I think about private credit in particular, it's not just how connected it is to the banking system and Basel III rules. Tell me about all the insurance companies that are now fundamentally dependent on these private credit investments that they've made. Think about how these firms effectively are stuffing the channel and oftentimes their own channel.

16:12Andrew Ross Sorkin: You could even argue they're self-dealing. Oftentimes, the private credit firms own insurance companies. And so how are they going to, you know, if and when they actually have to pay, what happens? Could you get into an AIG kind of style situation where people don't believe the marks? That's another issue, the marks. You know, once you get into a private universe and you get into this mark to make believe situation, that's complicated. And by the way, we just passed a new law in this country that's effectively going to allow private credit, private equity, venture capital, crypto, all of this to live inside of your 401k and retirement accounts.

16:47Felix Salmon: Yeah, but that's 20 years. No, but I mean, I take your point. I think the reason why this is so germane to the book is the fundamental question, which is, did the crash of 1929 cause a financial crisis? And was the Great Depression a really big financial crisis? I kind of struggled a little bit reading your book because, spoiler alert, it doesn't actually end in 1929. It goes through the Great Depression. You have the crash in 1929. Life goes on. There's a bunch of really stupid decisions made in the White House and at the Fed. And macroeconomic policy was bad. And terrible macroeconomic policy ends up with a Great Depression.

17:28Felix Salmon: But the thing which I'm still a little bit unclear about is to what degree are these two things linked? To what degree is the crash and the depression all part of the same story?

17:38Andrew Ross Sorkin: Okay, so two things. First is, I originally planned to write the book just about the year of 1929. That was my original ambition. And it became clear to me as I was writing that you could not actually write it that way because it was actually a bigger story. And the crash itself of 29, to me, was just the first domino. And that the story was so much bigger. And that domino, though, I think cast a pall and effectively hit so many other dominoes, which then became bad decisions politically, policy wise, whether we're talking about Smoot Hawley, whether we're talking about tax policy, whether talking about gold standard questions, Fed independence with all of those things that I think started with the crash and then just, you know, kept going.

18:21Andrew Ross Sorkin: And clearly, you know, Ben Bernanke famously did his PhD thesis at Princeton on the Great Depression. And God bless him because I think he didn't make a lot of the same domino. You know, the first domino went down in 2008. And thank God that all the other dominoes didn't. Because I think we learned from some of the other dominoes as well.

18:37Felix Salmon: Well, didn't he famously give a speech where he basically said to, was it Galbraith or his co-author? That like, thanks to you, we will never make these mistakes again?

18:46Andrew Ross Sorkin: I don't know. I wish I did. But the piece of it, though, that I think I would not argue with you about is that I do think it is a domino. I don't think they're separate issues. I think they all get conflated together. And by the way, one of the reasons I wanted to write the full sort of story in this way is because I think that most of America doesn't know the story this way. They think that there was some one terrible, horrific day in October that led to the Great Depression. And that was it. And there's about like 100 things that happened.

19:15Elizabeth Spiers: One thing that really struck me in reading about Hoover's reaction to all of this happening was that he had a tendency to just hand wave it away because he really thought that this was just a psychological phenomenon. Do you see Trump doing that right now? It feels like there is a little bit of gaslighting, bad things are happening and a hope that. It's hard to compare Trump and Hoover specifically, but I do think there's this concept, can you jawbone your way out of it, right?

19:44Andrew Ross Sorkin: Can you somehow get people to believe something even if they don't feel it? Now, by the way, talking about that, Biden was terrible at that, right? He would tell you that the economy was great and the people didn't feel it and that it was their problem. That didn't work for him politically. I don't think it worked for Hoover politically too well.

20:00Elizabeth Spiers: Well, his solution was, you know, as you pointed out, to tell people to just spend money. Right.

20:05Felix Salmon: I remember when George W. Bush did that after 9-11. He was, everyone was like, what can we do? He's like, I think you should go shopping. And everyone was like, what?

20:12Andrew Ross Sorkin: But you also had this other unique character, which I don't think gets enough either credit for maybe influencing things, in Andrew Mellon, who was the Treasury Secretary at that point, who was like, screw everybody. This is capitalism, baby. This is what happens. You want to risk it at the gambling table? You're going to go home empty-handed and you're going to like it. I mean, that was really his sort of thought. And I think he was whispering to Hoover. Now, Hoover didn't really like Andrew Mellon particularly, and then summarily got rid of him. But I think at the most acute times during that crisis, you did have Andrew Mellon trying to play a bigger role.

20:45Felix Salmon: We need to take a very quick break here, but I am going to come back and ask you about Terrence.

20:51Andrew Ross Sorkin: What a sexy subject. What a great tease for everybody to keep coming back for more.

21:05Felix Salmon: So, Andrew, tell me, you can't jawbone your way out of an economic depression. But can you, just upon your eight years of reading history, can you get out of it by imposing massive tariffs on every country in the world?

21:18Andrew Ross Sorkin: Historically not. Historically not. You know, I was shocked to learn that global trade, So the Smoot-Hawley tariffs go into effect 1930. Hoover had campaigned on tariffing other countries, in large part to gain the vote of farmers in the middle of the country. So he thought this was a campaign promise he had to keep. He, like Trump, gets a letter from a thousand economists who signed the same letter saying, please don't do this. The leading bankers in America are, you know, making pilgrimages to the White House, getting down on their knees and begging, please don't do this. You're going to ruin everything.

21:54Andrew Ross Sorkin: And 12 months later, global trade had fallen by 60%. So that's just the empirical history. That's just what happened. There's a difference a little bit with the tariffs that Trump is imposing. In fact, the reason Trump has been able to impose the tariffs the way he has thus far, we'll see whether the Supreme Court thinks that he can do this, is he's leveraging a law that was put in place in 1934. So the original tariffs were put in place across the board. Every country had the same tariff, a little bit like what he wanted to do back in April. Now he's doing these sort of bilateral deals. The ability to do the bilateral deals came about in 1934 because the government said, we got to get out of this.

22:32Andrew Ross Sorkin: This whole tariff thing is a little crazy. And we got to somehow try to undo this. The only way we want to undo this is to actually go country by country and see what we can do. And that started to work or at least help the cause. So I'm not sure where we'll ultimately net out. But I imagine if we're all having this conversation 20 years from now, we will think that tariffs were not a great idea. Having said that, it feels like there's going to be a permanence to these tariffs, almost irrespective of whoever you think is in the White House. So I'm of the view, even if you put the most liberal candidate...

23:04Andrew Ross Sorkin: Are there any neoliberals in political life anymore? Yeah, I don't know who that person would be. And by the way, I would think that some liberals used to like tariffs. But let's say there was somebody in the office who hated tariffs. I'm not sure politically, when you're taking in this kind of money and also all of these companies that are now bringing some stuff back to the U.S. is actually happening, some of the manufacturing things and other things, how easily it would be to undo it because you're going to say to yourself, how, where are you going to find, if you're bringing$200 billion and now that's used in the budget, you're going to raise your hand and say, oh, I don't like tariffs.

23:35Andrew Ross Sorkin: I'm going to give up the$200 billion.

23:36Felix Salmon: I don't know. The only people who can do this are Chief Justice Roberts and Amy Coney Barrett.

23:42Andrew Ross Sorkin: Well, even if they do it, though, there's an argument to be made that Trump, under a whole bunch of other laws, can try to continue the tariffs. They might be lower in marginal ways. They might only be able to last 12 or 15 months at a shot, but maybe you have to keep redoing them. I mean, I think there's going to be a whole bunch of things that are going to happen irrespective of what the Supreme Court says.

24:02Felix Salmon: Yeah, I was definitely surprised after Janet Yellen came out under the first Trump administration and said, tariffs are terrible. You shouldn't put all of these tariffs on China. That's a really bad idea. She then becomes Treasury Secretary and leaves all those tariffs in place. And you're like, well, didn't you say they were a bad idea? Doesn't that logically mean you should get rid of them? But no, the entire Biden administration, they just kind of sat there.

24:26Elizabeth Spiers: Well, I would argue those tariffs were much narrower than what Trump has proposed. And I think what she was saying was really more a statement about broader-based tariffs.

24:34Felix Salmon: She was specifically talking about the Trump-won tariffs on China. Now, obviously, in relation to what we are now living under, they were tiny. But yeah, just as a sort of history repeats, since this entire podcast is about history repeating itself, it proved very difficult for the Biden administration to reverse a bunch of things that they had opposed when Trump was doing them. I think Andrew is absolutely right that that's going to continue to be the case if and when someone other than Trump is in the White House.

25:02Elizabeth Spiers: So your book also has, you know, an interesting arc for your protagonist, Charlie Mitchell, who was arguably the most prominent man on Wall Street at one point, and who ends up being hauled in front of Congress and essentially put on trial for potentially selling a lot of his stock to his wife. Do you see parallels there now where we have a group of people who are sort of venerated by society for their capitalistic successes? And then because the economy turns, and this could happen, I guess, with the tech industry, public perception of what they're doing changes pretty rapidly.

25:37Andrew Ross Sorkin: Well, look, this happened clearly in the financial crisis of 2008. All of generated. You know, by the way, back in the 1920s, it was really the first time that we, as the American culture, sort of took on these CEOs and financiers as sort of these heroic figures. They all of a sudden are starting to pop up on the cover of magazines, the way Babe Ruth and Charles Lindbergh were on the cover of magazines. That never happened before, but that was also a function of media. So all of a sudden they become famous. And you're right, Charles Mitchell, who was running a bank called National City then, which becomes Citigroup.

26:10Andrew Ross Sorkin: He was the, from a fame perspective, he was probably the Jamie Dimon of his time. I think he might be more akin to maybe like even a Michael Milken of sorts, actually, because Michael Milken, you know, one of the things that Charles Mitchell did was he was really the first person to start lending out money so that people could buy stock on credit. That was his invention of sorts, which is when you start to think about credit and, you know, junk bonds and things, that was, I think, something arguably Michael Milken did. But then if you go back in the financial crisis, all of these people that not only didn't go to jail, some of them didn't get prosecuted, but they all were hauled up in front of Congress and Occupy Wall Street and everybody hated the bankers.

26:49Andrew Ross Sorkin: And I think a similar thing is now happening to some degree with tech, maybe not really.

26:54Elizabeth Spiers: Yeah, there's another parallel that really struck me reading your book. And it was this sort of continuous conversation that we're still having about who's allowed to speculate and who can benefit from it? And when things go south, who's responsible? So there was a great sort of antidote where Mitchell tells the woman who's lost her entire life savings, well, you shouldn't have been gambling. And you see those conversations happening around crypto right now. And definitely during the first dot-com boom, there was a lot of that around early stage venture. Should regular people be allowed to invest in a highly risky asset class?

27:26Elizabeth Spiers: What do you think we've learned from all of that? Or have we learned anything? Are we just going to go through this on crypto?

27:32Felix Salmon: Can I answer that question? Because I feel like the question is, we have 100 % asked and answered that question unambiguously. And all you need to do is look at the New York Stock Exchange taking a multi-billion dollar stake in Polymarket and all of the crazy going on with crypto. And the fact that even after, you know, GameStop and all of the meme stocks kind of imploded, no one got hurt anyone could really see in a meaningful way. And the fact that sports betting is now happening on like regulated securities exchanges, all of it is a pointing in the same direction, which is anyone can gamble in as risky a way as they like, and it's on them and there's no paternalism anymore.

28:18Felix Salmon: It's off to the races and the less money you have, the more you need to gamble because it's the only way you're ever going to get rich.

28:24Andrew Ross Sorkin: Okay. So by the way, I think that you are right in that that seems to be the direction of travel. The question is, should it be the direction of travel? There's no question. We're moving towards this sort of gambling culture. It's the revealed preference of America, Andrew. Who are you to stand in the way of progress? Well, but this is very interesting to me because there was a period of time during the GameStop scenario where I would go on television or write in DealBook in the morning, folks be careful. And you would get this sort of huge response back from people who said, who are you to tell me to be careful?

29:00Andrew Ross Sorkin: And by the way, you think you're protecting me. You're not protecting me. You're protecting the man. You're protecting the man because that's, that's where the real problem here lies. So yes, everybody wants the lottery ticket. I'm not telling you they don't want the lottery ticket. The question is, is there a role for government to say you can't have the lottery ticket? And that's an interesting question to me. You know, I think you do need some speculation in the system. By the way, speculation, we all think is a dirty word. It's the twin to innovation. Like somebody did have to speculate on Elon Musk at some point.

29:33Andrew Ross Sorkin: Like that has to happen. There has to be a little bit of a gamble. But if you let everybody just completely to their own devices, you know, the human condition is to want more. And that may be a problem.

29:43Felix Salmon: It's a good question. My only point is this question that has been ask and answer to this point.

29:49Andrew Ross Sorkin: The thing is, we're now moving into this situation where everybody's going to gamble. And if everybody wants more and there's no guardrails and we start to take the guardrails off, you know, you were talking about the idea that private credit, venture capital, everybody's going to get access to all this stuff, by the way, without it actually being in the public markets, without disclosure, right? We're now people are tokenizing private companies. That's where the problems lie. Like that's when the charlatans arrive. That's when the fraud happens. By the way, think about SPACs, which was done out all in the open.

30:18Andrew Ross Sorkin: New product comes on the market. Everybody says, give me an act. I want access. I want the lottery ticket. There were some winners, but only a couple of winners, like a lottery ticket. Now, the whole system didn't fall apart, but I think a lot of people got burned. Is that a good thing? Is that a bad thing? I don't know.

30:32Felix Salmon: And to bring it back to your book, the whole book is really the history of what happens when a completely unregulated financial system gets out over its skis. you wind up with a massive crash then partly because of the massive crash you wind up in a terrible recession and ultimately what you wind up with is you know the securities and exchange act and the sec and a whole bunch of regulation designed to keep people safe because people are like this crazy speculative bizarre turns out in hindsight to have been a terribly bad idea And that lesson that we learned in the 1930s, we have now forgotten.

31:13Felix Salmon: And you're not just talking your book, but it makes sense for you to say, it's important not to forget that lesson. That, my friend, is the purpose of the book.

31:26Elizabeth Spiers: Or not to intentionally undermine what we learned from it. The erosion of Glass-Steagall over the years has been sort of astonishing. When you go back and you read your book or you know, the history of it, the extent to which we just don't remember what the perils are.

31:41Andrew Ross Sorkin: Yes, but I don't want to give it away because I actually hope people do read this part because it was to me the most surprising. Glass-Steagall, which, you know, people of Ballyhooed is this great invention to break up the banks. Elizabeth Warren loves it. And Carter Glass was sort of heralded for it. I think when readers actually get in there and understand how and why that bill was actually created, it's kind of shocking that it's not for the reasons you actually think.

32:06Felix Salmon: Not to mention that my hobby horse, which is that banks that merged commercial banking and investment banking were the ones that actually survived the financial crisis. And it was the pure investment banks who hadn't merged, like Lehman Brothers and Bear Stearns, that wound up failing. But all of which is not to detract from the timeliness of this historical tome. It's available in all good bookstores now, but I'm assuming, Andrew, since it's a nonfiction book, it has to have a subtitle, right?

32:34Andrew Ross Sorkin: Or is it just called 1929? It is called 1929, Inside the Greatest Crash in Wall Street History and How It Shattered a Nation.

32:43Felix Salmon: I mean, if that doesn't get you out to the bookstores to spend your 30 bucks or whatever it is, what will? Andrew Ross-Lawkin, thank you very much for coming on the show. Thank you to Shane and Roth and Jessamyn Marley for producing. And thanks to all of you listeners for writing in on sleepmoneyatslate.com. We will be back on Saturday with a regular Sleep Money.