There was a time when a technology boom swept across the land. Entrepreneurs touted a new, improved life for everyone. The stock market marched up and up, with no limit in sight. Life was good…then came the crash.

The leading technology stock of the day lost 75% of it value. The Dow Jones Industrial Average (DJIA) plunged. Investors panicked, a depression swept across the land. Suddenly, the new technology did not matter.

A few years later, Americans expressed their revulsion against corporations across the land and cried out for an end to corporate greed and corruption. The President and Congress acted, and a host of new regulations sprang forth.

We can learn a lot from the way the crash occurred in 1920-21. The government regulatory efforts happened in 1932 when President Franklin D. Roosevelt and a newly elected Democratic Congress took control of the country.

The fact that much of this mirrors our situation today is important…we’ve “been there, done that.” But what is equally important today is understanding what happened between the crash and the government intervention 10 years later.

The Henry Ford generation was a generation of innovators and entrepreneurs. Born in the latter half of the 1800s, they invented the car, the airplane, the telephone, and harnessed electricity. Their numbers were greatly increased by a huge wave of immigrants who hit our shores in the latter part of the 19th century and the early part of the 20th Century.

They worked hard, bought houses, bought cars, educated their children, and spent money through the first two decades of the 20th century. They also benefited from a booming stock market. This generation was mirrored 80 years later by the baby boomers… innovators, entrepreneurs, and spenders.

The crash that occurred was caused by an overabundance of new technology coming to market. There were not enough buyers. The shakeout that ensued created a mini-depression as stock prices plummeted. But it only lasted for a few short years. From 1922 to 1929 the stock market resumed its march up and to the right.

The high tech companies of the time, such as General Motors and General Electric used their cash and muscle to gain market share and develop dominant positions within their industry. The strongest not only survived this shakeout, but they were able to consolidate their positions within their industry and became dominant forces on Wall Street and in the heartland.

During this period the Dow increased at a six-time multiple. General Motors saw its stock drop 75% before rebounding to a 22 times multiple before the crash of ’29.

That crash was the result of too much technology coming to market at one time…just like we are living with today. The crash did not kill technology…just allowed the strongest to survive and carry the technology of the day to into the mature industry stages.

The government intervention was not dissimilar to what we will see as a result of accounting scandals. It did not kill business, as business has thrived for 70 years in its wake. To say it needs some modernizing goes without question.

As investors, we can learn from the experiences of our parents and grandparents. History has a habit of repeating itself. If so, we may yet have our Roaring 2000s.

Bruce Fenton is a financial consultant, a writer, and the president and founder of Atlantic Financial Inc. Bruce welcomes inquiries, comments, and questions. He can be reached by contacting The Fenton Report.