The Real Deal

Take that look of worry
I'm an ordinary man
They don't tell me nothing
So I find out all I can
--Phil Collins

Anyone seeking to wrap their heads around current economic and market problems is well advised to study the Great Depression. The parallels are interesting. To obtain a solid grasp of the context, one should bracket study around the early 1910s (founding of the Fed and WWI) to mid 1940s (WWII) period of US and world history.

If you're seeking fresh insight unshackled from revisionist history, I recommend accounts of Anderson (1949) and Rothbard (1963). Both provide outstanding perspective as viewed thru the eyes of expert economists with excellent command of the period.

More recently, I've been sampling the writings of a group of 'social commentators' of the times. Folks like Albert Nock, Isabel Paterson, and Henry Hazlett offered perspective thru the lens of journalists rather than trained economists. I've found their views to add considerable color to Depressionary history.

You'll most certainly learn things never taught in typical social studies or history classes.

Currently, I'm chewing thru work of Garet Garrett. Garrett was a writer for the Saturday Evening Post from the 1920s to 1940s. Unlike much of the mainstream media at the time, he opposed America's involvement in both world wars. He also wrote lucidly about the causes of the Crash of 1929 and about New Deal policies (to which he was largely opposed).

I just completed Garrett's 1932 book, The Bubble That Broke the World. Garrett particularly focuses on the role of post WWI debt financing in blowing the 1920s bubble and its subsequent poppage. The 2nd essay, which is truly must reading, entitled "Anatomy of the Bubble" deftly describes public works spending (the 'pyramid' metaphor is brilliant), ins and outs of banking operations and leverage, and the herd mentalities that precipitate finanical booms and busts.

Like many works from this period, it could have been written yesterday.

References

Anderson, B.M. 1949. Economics and the public welfare. New York: D Van Nostrand Co.

Garrett, G. 1932. The bubble that broke the world. Boston: Little, Brown, & Company.

Rothbard, M.N. 1963. America's Great Depression. Princeton, NJ: D Van Nostrand Co.