The Financial Meltdown of 2008 was one of the most critical events in American history. As we mark the 100th anniversary of World War I, there are a number of parallels that can be drawn between these two events that changed the course of history.

The financial meltdown wiped out some $11 trillion of the nation’s wealth. It eliminated more than eight million American jobs, many of which are gone forever. It froze the nation’s vast financial credit system, leaving millions of businesses without the cash needed to operate. It forced the federal government to spend $2.8 trillion and commit another $8.2 trillion in taxpayer funds to bail out crippled corporations deemed “too-big-to-fail.” It cost millions of Americans their homes, life savings and hopes for a decent retirement.

The New Year is a time to reflect on lessons from the past. Scholars still study World War I and the changes left in its wake. Like the Financial Meltdown of 2008, the war was one of the most critical events in American history.

In 1914, Archduke Franz Ferdinand was heir to the throne of the multi-ethnic Austro-Hungarian Empire. On the bright Sunday morning of June 28, he and his wife, Duchess Sophie, made an official state visit to the Bosnian city of Sarajevo, which was then an occupied province of the empire.

Late that morning the cars in their procession made a wrong turn on the unfamiliar streets of Sarajevo and halted to get their bearings. At that moment,   Gavrilo Princip, a young Bosnian Freedom Fighter – or terrorist, depending on your point of view – fired two shots into the back seat of the open car carrying the archduke and duchess and killed them both.

Europe proceeded to come apart at the seams. Fewer than six weeks later, on Aug. 3, the armies of Kaiser Wilhelm’s Germany invaded Belgium. By the middle of August, the lineup of combatants was basically complete. Britain, France and Russia were formally at war with Germany and Austria-Hungry.

The war’s staggering costs horrified the world. All told, the 16 nations that ended up involved spent the equivalent of $3,000 trillion (in inflation-adjusted 2009 U.S. dollars) and mobilized 65 million troops, 12 percent of whom were killed. Another 33 percent were wounded.    ·

Three of Europe’s four leading monarchs were toppled. Only Britain ‘s royal family survived.

The Austro-Hungarian Empire collapsed and was replaced by some half-dozen ethnically based nations, most of which were overrun by Germany in World War II and became puppet states of the Soviet Union thereafter. And of course, the war spawned communism and fascism.

Europeans, having borne the brunt of the suffering, lost confidence in the so-called ideals of western civilization they’d taken for granted before 1914. The credibility of their governments was particularly hard-hit. Citizens were convinced that those governments had persistently lied to them to protect the elites at the cost of everyone else and squandered millions of lives by mismanaging the war.

Victors and vanquished alike were left bankrupt, owing more to the United States (which sat out most of the war and became the world’s leading creditor nation) than they could ever repay and cementing America’s rise as an industrial power.

And all for a war that settled virtually nothing.

Our generation experienced its own version of the “Guns of August” when the world of international finance melted down so catastrophically in 2008. The meltdown drove the country into the worst economic crisis since the 1930s.

Some people may find obvious parallels to 1914 in the fall of the famed investment banking house of Lehman Brothers, which the federal government allowed to collapse into bankruptcy in September of 2008.

But a more telling parallel to Gavrilo Princip drawing his pistol may have occurred more than a year earlier in July of 2007, when investment banking firm Bear Stearns & Co. placed two of its hedge funds in bankruptcy because they had run out of cash.

Little more than a year later, the chain of events that bankruptcy started had changed the world forever.

originally published: January 25, 2014