This is another in the series on specific events in history and continues the year number trend. 1929, by Andrew Sorkin, is a recent book describing the period around the 1929 stock market crash and the initiation of the Depression in the 1930s. As with 1873, which was centered more in Europe, this market crash and economic decline was global in nature. And as with 1873 we see the role of greed, debt, and delusion. Human nature always wins out, and the ability of large numbers of humans to resist reality appears non-existent. You would think by now we would have learned, but as recently as 2008 and now again to some extent, we have a lot of people thinking investing, largely by using debt, in a hot area is a sure winner. History says it is a sure loser.
Many of the abuses that led to the 1929 crash–excessive use of debt to buy stocks, overt manipulation of stock prices by speculators and bankers and securities firms–have been eliminated, but people still find ways to be duplicitous and to be gullible. The book 1929 tells the story by following a number of key individuals–bankers, investors, speculators, politicians, economists, regulators and others. All of these people are supposedly smart and experts in their fields and most made big mistakes that worsened the situation. The few who were consistently warning of the overpriced market and that a crash was coming were ignored or ridiculed.
The people you feel most sorry for were the average workers and small businesspeople who were enticed into the stock market by false promises of easy gains, and often encouraged to use debt to buy shares. These people often lost all their savings and had houses or other property foreclosed on. Politicians failed to respond quickly enough and/or played politics. Roosevelt, who is the most over-rated president we have had, refused to help in the then-extended period between election and inauguration and wanted Hoover to take all the blame. A Democratic congress similarly refused to assist. This delay allowed a continuing lack of confidence in the economy and caused a number of bank failures, which fed on themselves.
The regulatory changes that resulted from the 1929 crash have been largely beneficial. But the Roosevelt legacy during the Depression started us down the road of immense, and futile, government spending. The truth is that the US economy did not really recover until before the Second World War, when massive defense spending lifted the private sector. Roosevelt should get credit for his leadership during that war, but also the blame for poor economic policies and wasted government spending.
The book is an easy read, very engrossing and it may help individuals learn to be extremely cautious about how they invest their money and spot the signs of a dangerous over-extension of the market and use of debt.
I have to agree that Roosevelt is highly overrated as president. The US suffered far worse from the great depression than most every other country precisely due to FDR’s policies.
His WW2 legacy is mixed with very good and very bad policies. He did a good job with getting Marshall and King to run the war along with getting some preparations going in 1940 as WW2 was looming with the potential of US involvement. Also some credit with the Manhattan project. The rest of his WW2 legacy was very bad.
He kept Mcarthur on as SW Pacific general for political reasons – probably the worst general during WW2
He kowtowed to Stalin which allowed the soviet domination of eastern Europe for 30 years along with facilitating Mao’s take over of China. Churchill (and Patton) was very congnizent to the Geopolitical consequences of appeasement of Stalin.