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The Great Crash 1929 Paperback – September 10, 2009
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Galbraith writes with great wit and erudition about the perilous actions of investors, and the curious inaction of the government. He notes that the problem wasn't a scarcity of securities to buy and sell; "the ingenuity and zeal with which companies were devised in which securities might be sold was as remarkable as anything." Those words become strikingly relevant in light of revenue-negative start-up companies coming into the market each week in the 1990s, along with fragmented pieces of established companies, like real estate and bottling plants. Of course, the 1920s were different from the 1990s. There was no safety net below citizens, no unemployment insurance or Social Security. And today we don't have the creepy investment trusts--in which shares of companies that held some stocks and bonds were sold for several times the assets' market value. But, boy, are the similarities spooky, particularly the prevailing trend at the time toward corporate mergers and industry consolidations--not to mention all the partially informed people who imagined themselves to be financial geniuses because the shares of stock they bought kept going up. --Lou Schuler --This text refers to an out of print or unavailable edition of this title.
"Most intriguing for its depiction of the delusion that swept the culture, and the ways financiers and bankers, wishful academics and supine regulators willfully ignored reality and in the process encouraged the epic collapse of the stock market." (New York Times )
"Paints a vivid picture of how the supposedly rational capitalist system seemed to lose its collective mind, and it has spooky parallels with what we are witnessing now." (Fortune ) --This text refers to an out of print or unavailable edition of this title.
Top Customer Reviews
A negative is that the Kindle version is very poorly copyedited. The electronic version is rife with misspellings, missing words, and other copy errors. Buy the print copy.
Galbraith's theme is that market stability and corporate interests are fundamentally at odds. After pumping up prices by gambling with borrowed money, the financiers and executives simply hope to cash in and make it out alive. In the ensuing crisis, CEOs will never speak evil about their own companies or the condition of the market, so their speech is about as useful to an investor as a pre-game pep talk is to a bettor. Analysts, as well as executives, are salesmen of their own stock, and their primary objective is to get you to buy high.
Galbraith is a talented storyteller, and he highlights themes that are likely to accompany future bubbles so that the reader knows what to be skeptical about. This is a very entertaining read, and if you actively compare what Galbraith tells you of the 20's to what you know about the 90's, you'll likely not be swept away by future investing mania.
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Having learned a thing or two since I wrote that, I can think of no book better suited to explain our current predicament to the layman. Excessive leverage, housing bubble, financial deregulation, and crony capitalism -- sound familiar? You'll read about this stuff happening back in the '20s and shake your head in disbelief.
According to John Galbraith, the stock-market crash that took place in the fall of 1929 was typical of this prototype. Mr. Galbraith, a Harvard economist, traced the optimism to the Florida real-estate bubble of 1925 which made people forget the elementary rules of money making. What follows is an elegant narrative that interweaves economics with history to produce one of the most telling and lucid accounts of the developments, economic and otherwise, that lead up to the October 1929 crash.
The crash, according to Mr. Galbraith, was caused by an admixture of bad income distribution (economy too dependent on luxury spending and investment), bad corporate structure, bad banking structure, foreign imbalances, and bad economic intelligence. In seeking compelling explanations, the "Great Crash" often resists conventional wisdom: for example, to those who blame the abundance of credit, Mr. Galbraith answers: "on numerous occasions before and since credit has been easy, and there has been no speculation whatever." Mr. Galbraith looks beyond central banking and interest rates to compile a rich and diverse history of the 1929 crash.
So what about preventing future crises? Here, Mr. Galbraith is ambivalent. Regulation has and can play a substantial role in preventing future troubles.Read more ›
With the recent experience of seeing a market mania, I came away more impressed with this book than before. Professor Galbraith does a fine job of capturing the psychology that builds into and sustains a mania. He also writes like a novelist rather than like an economist. That talent makes the message easy to grasp and appreciate.
I was also impressed by how our popular perceptions of 1929 are so often wrong. For example, most people believe that many "broken" speculators committed suicide. Although some did, there was no significant rise in the suicide rate compared to a general trend in that direction.
Economists often like to fault the Federal Reserve for the crash. That blame seems somewhat misplaced when you learn that there was very little government debt that the Fed could repurchase to create liquidity. Had the Fed acted differently, the crash might have come a little sooner and not been quite so severe . . . but the fundamentals would probably not have changed too much.
Another misperception is that everyone was speculating. By even the most generous measures, the speculators probably never numbered over a million people.Read more ›
Most Recent Customer Reviews
Fine book. 4/5 because it isn't very in depth. Hits the major points.Published 2 months ago by Amazon Customer
I've just read this book for the third time in the last 30 years. It is eerily relevant to understanding the financial markets, including the post-bubble declines after 2000 and... Read morePublished 3 months ago by Bob Garey
The book is well written with insights on what the american people thoughts were. It highlights how american invested in the stock market due to bankers selling them the products... Read morePublished 5 months ago by Miguel Awesome H.
As great a book as I had heard it was. Fascinating history.Published 10 months ago by James G Hathcoat