On this day in economic and financial history …
The Dow Jones Industrial Average reached the end of its financial crisis bear-market slide on March 9, 2009. This was only the second bear market to destroy more than half of the Dow’s value and thus was the second most devastating crash in Dow history, behind only that which began the Great Depression. It also became the second most volatile bear market in history, with the exception of the very brief crash of 1987 — an average trading day during the financial crisis slide saw the Dow’s change by an average of 1.51% in either direction.
The causes and consequences of this collapse continue to be debated and explored years later, and investors remain on edge, the memory of wealth destruction fresh in their minds. Nearly four years to the day after the crash ended, the Dow surpassed its previous heights, returning to levels first reached in 2007. Will this new level endure? Only time will tell.
Click here to see an in-depth timeline of the financial-crisis crash, from the early warning signs to the first days of recovery.
Wealth of Nations
Adam Smith’s An Inquiry Into the Nature and Causes of the Wealth of Nations was first published on March 9, 1776. It is now widely regarded as one of the cornerstone texts of classical economics, and it has influenced economics writers for centuries in the same way that Isaac Newton advanced physics and Charles Darwin revolutionized biology. Founding Father Alexander Hamilton pushed back against it in 1791, but both James Madison and Thomas Jefferson found wisdom in its pages. Jean-Baptiste Say (of Say’s Law) and economic demographer Thomas Malthus both drew inspiration from it. So did Austrian economist Ludwig von Mises, who embraced Smith’s support of generally unfettered capitalism.
Smith put forth the concept of gross domestic product as a measurement of national wealth, supported a division of labor into specialist fields for greater productivity, recognized the two-way benefits of trade, and identified the underlying efficiency in the apparent chaos of free markets. These are only some of the key elements of Smith’s 950-page magnum opus. Few (if any) economics texts come close to matching it in importance, with the possible exception of John Maynard Keynes’ General Theory of Employment, Interest, and Money.
Barbie girl in a Barbie world
Barbie, the world’s best-selling toy, made her debut for Mattel, Inc. (NASDAQ:MAT) on March 9, 1959. The doll’s launch was the result of a multiyear development process that began, simply enough, when Ruth Handler, the wife of Mattel, Inc. (NASDAQ:MAT) co-founder Elliot Handler, noticed how much her daughter Barbara enjoyed playing with paper dolls. A 1956 trip to Europe exposed Ruth Handler to the German Bild Lilli doll, which bears a distinct resemblance to Barbie, with its blonde hair, movable head and limbs, and mature (for a plastic doll) appearance. Handler retooled Bild Lilli for the American market, and Barbie, named after the Handlers’ daughter, made her debut at the 1959 American International Toy Fair in New York.