29 November 2007

Booknotes - Oh Yeah?

For years, I've been in possession of a 1931 book entitled "Oh Yeah?"

I recall finding it on my Dad's bookshelf. As a child of the Depression, he often expressed a mix of macabre humor and frustration about the 30's. He also would worry that any economic downturn would lead to another one. I recently pulled "Oh Yeah?" off the shelf and perused its collection of contemporary quotes by presidents, business leaders, economists, and journalists.

As this book was published in 1931, it captures only the very beginning of the crash and ensuing depression. However, near the end, on page 59 (yes, it's short and sweet), there's a calendar for 1931, with a quote for each month.

JANUARY The American business man is getting his tail feather off the ground.--Louis K. Liggett, Republican National Committee.
FEBRUARY The bottom has now been reached.--Roy A. Young, Federal Reserve Bank of Boston.
MARCH The long decline has at last been halted.--Dr. Julius Klein, Assistant Secretary of Commerce.
APRIL Business has turned the corner.--Roger W. Babson.
MAY Big attendance at race meetings is one of the best indications of improving business conditions.--Stuyvesant Peabody, Illinois Turf Ass'n.
JUNE Much of th present crepe-hanging should be historical....In July, up we go.--Dr. Julius Klein.
JULY A level of resistance is being reached.--Bradstreet's.
AUGUST Angels, looking down, probably pay little attention to our difficulties.--Arthur Brisbane.
SEPTEMBER The glow of righteous satisfaction that many have felt in their recent savings should be replaced by the knowledge that thrift under certain conditions is very wasteful.--William Trufant Foster, Economist.
OCTOBER The overliquidated prices of many securities are a sign of too short perspective and too excitable temperament.--Charles M. Schwab.

The book seethes with skepticism. So much hooey said by so many people who should know better, why should any of these predictions be believed? Yes, as a reader in 2007, we know how wrong these men were, but I think "Oh Yeah?" is still valuable beyond my sentimental reasons for keeping it on my bookshelf. The editors of "Oh Yeah?" were right. They weren't going to make the same mistake, and contribute to the folly of economic forecasting. That's a valuable take-away from "Oh Yeah?". They seemed uncertain about the future and closed the wee volume with a perfect pessimistic punch:

"The country is not in good condition.

--From "Calvin Coolidge Says," January 20, 1931."

As much as I enjoy "Oh Yeah?", it's difficult to extract a broader understanding of the 1929 crash and aftermath from a contemporary, primary source. It was written for people who were living through the turmoil, who would recognize names like Reed Smoot, Arthur Brisbane, and Roger Babson. The only name that still resonates today is Charles M. Schwab, but we're now on more familiar terms when we Talk to Chuck.

So that led me to John Kenneth Galbraith's 1954 classic, "The Great Crash 1929".
I'll hopefully post my thoughts on that book soon.