The Great Crash 1929
The Great Crash 1929
The most terrifying book Ive read in a while. Galbraith recounts and analyzes the months leading up to the October 1929 stock market crash and the crashs aftermath. The book is frightening because almost every page has parallels to todays economic situation:
Around 1926-27, there was a real estate bubble in Florida; when that bubble popped, the stock market began to take off in its own bubble. Today the order is reversed: the stock bubble popped in 2001, and the housing bubble hasnt quite burst yet.
The downturn that led to the Depression actually started in June when indicators began sinking, but the abundant profits from stocks helped prop up spending. When stocks dropped, indicators sunk into a steep three-year decline. Today indicators bounce around from month to month, but generally they dont indicate much growth.
The income distribution in the 1920s was strongly skewed toward higher-income people; this meant that the economy was dependent on their purchases of luxury items. When