What little difference 80 years makes

Posted on March 24, 2010


1929 is remembered because there were then evident all the elements of the euphoric episode and especially the powerful commitment to presumed financial innovation.  This last included, as ever, the rediscovered wonders of leverage, and the parade of publicly celebrated genius. Then came the crash and the eventual discovery of the severe mental and moral deficiencies of those once thought endowed with genius and their consignment, at best, to oblivion, but more grimly, to public obloquy, jail, or suicide. The justification of the expansion was the political, social and economic order that was associated with the benign and, inevitably, Republican administration of Calvin Coolidge and his Treasury Secretary, Andrew W. Mellon.  Most of those who manage investment operations or who have sizable amounts of money to invest are, indeed, Republican in their politics.  Naturally, perhaps inevitably, they believe in the politicians they support, the doctrines these profess, and the economic advantage flowing therefrom.  It is especially for those seemingly so blessed to be persuaded of the new and approximately infinite opportunities for enrichment inherent in a Republican age under a Republican regime.” — John Kenneth Galbraith, A Short History of Financial Euphoria.