by Daniel Brouse
October 13, 2025
In 1919, General Motors transformed the American economy by founding the General Motors Acceptance Corporation (GMAC), a revolutionary move that allowed customers to buy cars on credit. This innovation made cars accessible to the masses through installment plans and helped ignite the era of consumer financing. What began as a tool to boost car sales quickly evolved into a model for broader consumer credit across multiple sectors.
By the late 1920s, Wall Street adopted a similar approach. Brokerages began allowing retail investors to purchase stocks on margin — putting as little as ten percent down and borrowing the rest. This was marketed as “democratizing access” to the markets, a patriotic slogan that masked the systemic risks of unchecked speculation. With little to no regulation, the market ballooned into a fragile bubble built on debt and delusion.
Then came the inevitable. In October 1929, the stock market crashed, wiping out fortunes overnight and triggering the Great Depression. In response, sweeping regulations were enacted to protect small investors and stabilize the financial system — including the Securities Act of 1933, the Glass-Steagall Act, and the creation of the SEC. These guardrails safeguarded the economy for decades.
Fast forward nearly a century, and history is repeating itself. Since Donald Trump’s second term began, many of those same regulatory protections have been rolled back or weakened. Under the guise of “free markets” and “democratizing access,” Trump’s administration has pushed to open high-risk assets — such as cryptocurrencies and private equity — to small investors. Once again, speculative leverage is being glorified as empowerment, while systemic risk quietly grows beneath the surface.
Today, brokerages like Robinhood enable investors to buy stocks using borrowed money — eerily similar to the margin practices of the 1920s. Market leverage has reached its highest levels since 1929. Meanwhile, Trump’s protectionist trade agenda, marked by sweeping tariffs and economic isolationism, echoes another disastrous historical precedent: the Smoot-Hawley Tariff Act of 1930. That policy, intended to protect American jobs, instead provoked global retaliation and deepened the Great Depression by collapsing international trade.
The parallels are alarming. Over-leveraged markets. Deregulated speculation. Protectionist trade wars. Rising inequality. All signs point to a familiar outcome.
The question is no longer if the market will crash — it’s when. And this time, with far greater global interconnection and systemic debt, the fallout could make 1929 look like a dress rehearsal.