THIS is part of why government and business leaders cannot necessarily be trusted re Y2Kgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
The purpose of this post is solely to illustrate the degree to which government and business spin was applied to a matter of national urgency and importance. Although there are many parallels between the condition of the stock market in pre-October 1929 and its current condition, please concentrate on the parallels between a 1930 and a 1999 spin of a significant event. (If you wish to comment on the stock market aspects, please feel free to cut and paste to a new thread.)
The following excerpt is from "distingished economic historian," Broadus Mitchell's Depression Decade: From New Era through New Deal, 1929-1941 (New York: Rinehart & Co., Inc., 1947), pp. 31-32, Quoted in David A. Shannon, The Great Depression (Englewood Cliffs, NJ: Prentice-Hall, 1960).
Public statements at the new year on the business outlook for 1930 damaged more reputations of forecasters than they bolstered. In the midst of the stock market debacle two months earlier, prominent persons whose word was apt to be taken--bankers, industrialists, economists, government officials--had declared their confidence in stocks, not to mention underlying business soundness. At the beginning of the year more perspective might be looked for. The optimism excpressed, however, was hardly representative, for most of those with serious misgivings about the future did not offer their opinions or ***find them published***. [Emphasis supplied.] Secretary of the Treasury Andrew W. Mellon committed himself blithely: "I see nothing. . . in the present situation that is either menacing or warrants pessimism. . . . I have every confidence that there will be a revival of activity in the spring and that during the coming year the country will make steady progress."
The White House repored the President as considering "that busiuness could look forward to the coming year with greater assurance." Willis H. Booth, president of the Merchant's Association of New York, saw "no fundamental reason" why business should not find itself again on the upgrade early in 1930.
The Guaranty Trust Company of New York expressed qualified hope: "Although there is no failure to appreciate the importance of the collapse of stock prices as an influence on general business or to ignore the historical fact that such a collapse has almost invariably been followed by a major business recession, emphasis has. . . been placed on certain fundamental differences between the conditions that exist at present and those that have usually been witnessed at similar times in the past."
Secretary of Commerce Robert P. Lamont contented himself with listing the gains that the year 1929 as a whole had registered over 1928 and with predicting prosperioty and progress "for the long run." He did not say how long the run was to be.
[Former Youngstown, Ohio, Mayor] Joseph L. Heffernan, "The Hungry City: A Mayor's Experience with Unemployment," The Atlantic Monthly, CXLIX (May, 1932), pp. 538-540. Quoted in David A. Shannon, The Great Depression (Englewood Cliffs, NJ: Prentice-Hall, 1960).
In December 1929. . . I attended a conference on unemployment. . . . Speaker after speaker told what his community would do to end the depression and how quickly it would be done. The unemployed were to be set marching gayly back to work without an instant's delay, and the two-car garage was to be made ready for further enlargement. . . .
[In April 1930]. . . I went to Germany. . . saw that the German people were in a bad way. On returning home , I made a public statement that Germany was on the verge of economic collapse, and predicted that the depression would take five years to run its course. Thereupon I asked for a bond issue of $1m for unemployment relief. Many leading business men went out of their way to show their disapproval. One of them voiced the opinoin of the majority when he said to me, "You make a bad mistake in talking about the unemployed. DON'T emphasize hard times and everything will be all right." An influential newspaper chastised me for 'borrowing trouble'; the depression would be over, the editor maintained, before relief would be needed.
Discussion dragged on for several months, and the gravity of the situation was so deliberately misrepresented by the entire business community that when the bond issue finally came to a ballot, in November 1930, it was voted down.
Thus we passed into the early days of 1931--fourteen months after the first collapse--with no relief in sight except that which was provided by the orthodox charities. Not a single move had been made looking toward action by a united community. . . .
I have cited these instances from my experience as mayor of an industrial city because they illustrate perfectly the state of mind which has been America's greatest handicap in dealing with the depression. Everyone will remember the assurances that were freely given out in November and December, 1929. by the highest authorities in government and business. The country, we were told, was 'fundamentally sound.' Nevertheless, general unemployment continued to increase through the winter. Then in the spring of 1939 it was predicted that we might expect an upward turn any minute. Yet the summer slid past with hope unfulfilled. Winter came again, and conditions had grown steadily worse; still nothing was done, because we were reluctant to face the truth. Our leaders, having made a bad guess in the beginning, have been unwilling to admit their error. With the foolish consistency which is the hobgoblin of little minds, they have persistently rejected reality and allowed our people to suffer by pretending that all would be well on the morrow.
-- Old Git (firstname.lastname@example.org), May 28, 1999
Thanks for the post, Old Git. Speaks volumes. Thanks for all of your other posts as well. you've always remained "on track".
-- Will continue (email@example.com), May 28, 1999.
If Old Git's posting doesn't make you believe in reincarnation, nothing will. LOL
Gotta history book?
-- Taz (Tassie @aol.com), May 28, 1999.
Absolutely dynamite! Great going, Old Git. Lets all think about this when we see statements by Koskinen et al (or read anything posted by the moronic NORM machine).
-- King of Spain (firstname.lastname@example.org), May 28, 1999.
During last year, Mammoth Lake, California was having some rumblings, volcanic quakes,etc., which was causing much concern to the local residents. The media was beginning to pick up on this information and the local Chamber of Commerce, Realestate Agents, and merchants came unglued by the publicity. These people couldn't have cared less if the entire area blew sky high as long as there was no advance notice that might harm their businesses, or stop tourists from visiting. So, therefore, do we expect any less from Alan Greenspan? Wall Street? Or any other of the financial moguls? ( P.S. There were dozens of people who knew the Titanic didn't have enough life boats if anything would happen.)
-- Richard Westerlind (Astral-Acres@webtv.net), May 28, 1999.
Good post, Old Git. For more related background, read P.A. Sorokin's books, especially "Man and Society in Calamity". Also, check out "When Money Dies" (different author -- old book).
my website: www.y2ksafeminnesota.com (new articles on it as of 5/26)
-- MinnesotaSmith (email@example.com), May 29, 1999.