Are we on the brink of another financial collapse? Journalist Andrew Ross Sorkin raises a chilling alarm: the AI boom might be artificially propping up the economy, echoing the dangerous speculation of the 1920s. But here's where it gets controversial: as stocks soar to record highs, Sorkin warns that the guardrails put in place after the 1929 crash are being dismantled, leaving investors vulnerable. Could history be repeating itself?
In a recent interview, Sorkin, author of 1929, draws eerie parallels between today's market and the lead-up to the Great Depression. Imagine the chaos of the New York Stock Exchange in 1929: panicked traders dumping stocks, investors losing everything, and the Roaring '20s coming to a crashing halt. Fast forward to today, and Sorkin argues we're in our own roaring 2020s, with stocks climbing for months, just like then. But is this a sustainable boom or a bubble waiting to burst?
Sorkin highlights the staggering 90% rise in the stock market from 1928 to September 1929—a surge that feels eerily familiar today. "I'm anxious," he admits, questioning whether current prices are sustainable. The AI boom, he suggests, could be either a gold rush or a sugar rush, and we won't know for years. And this is the part most people miss: the economy might be artificially inflated by AI investments, masking underlying weaknesses.
The 1929 crash was fueled by speculation and debt, as Wall Street lured everyday people into investing with borrowed money. Sound familiar? Today, regulations meant to protect investors are being relaxed, and access to risky private investments—like AI startups—is being "democratized." But is this democratization a step toward financial inclusion or a recipe for disaster? Larry Fink, CEO of Blackrock, advocates for allowing riskier investments in retirement accounts, but Sorkin warns this could expose ordinary investors to unchecked risks.
Here’s the controversial question: Are we sacrificing long-term stability for short-term gains? Sorkin points out that while guardrails have historically protected investors, some argue they’ve also kept people from getting rich. The push to open private markets to everyone, he says, could lead to another 1929. And with meme coins and crypto manipulation, history seems to be rhyming in unsettling ways.
Sorkin’s verdict? A crash is inevitable—we just don’t know when or how bad. So, what do you think? Are we headed for another financial collapse, or is this time different? Share your thoughts in the comments—let’s spark a debate!
