The Great Crash 1929, by John Kenneth Galbraith
In his book The Great Crash 1929, John Kenneth Galbraith, a foremost economist, examines the implication of the stock market crash of 1929 which has become a persistent fear for Wall Street ever since. A not too distant downturn of the market, in 1987, was compared to the Great Crash in the introduction, added for this release (1988). For instance, how many economists and investors alike were watching to see if the protections put in place to stop this kind of crash would work and prevent a repeat of 1929. They did appear to work and many believe that a crash, such as occurred in 1929, is entirely impossible given the current structure of the market and of governmental safeguards and other controls now in place. Galbraith finds that what happened in 1929 was not an isolated incident, he notes that earlier in history there had been other exploratory splurges. He notes, later in the book, an instance as early as beginning in 1637 when Dutch speculators invested in tulip bulbs. Galbraith also comments that we were going through a similar period, at the time his writing, but he makes no solid predictions about the outcome. Galbraith begins in 1928 as President Calvin Coolidge saw only optimism after the boom period of the 1920
The introduction added to the book for this release, on the other hand, does a good job of linking the analysis to broader issues concerning the market of the late 1980s. The events of the next several days are infamous, as the implication of a crash spread through the country. 's and failed to see the storm that was coming. His attitude toward the market was kept secret; however, so his election did not cause the panic it would have otherwise. The general opinion was split; some believed that there were indications that the boom would continue, while others began to be concerned. He notes that the traditional view has been that the economy was well into a depression by the autumn of 1929, but he notes that there was only a modest decline in economic activity by October of that same year. By 1927 the increase in speculation was obvious. The market became more and more significant and dominated both the news and the culture. The financial community tried to regroup and control the problem, to no avail. All other uses were irrelevant; conversely, speculation in the market provided early returns and less responsibility. Nonetheless, in some ways the analysis is not as insightful as it might be. Galbraith cites one such occurrence in June of 1928 when in fact the death of the bull market was predicted, however this prediction turned out to be premature. The market bubble might have been burst more slowly and carefully, but accomplishing this would have been difficult and delicate. I do, however, recommend you either read the introduction last or at least go back and read it again after you finish the book.
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