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3.7 out of 5 stars28
3.7 out of 5 stars
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2 of 2 people found the following review helpful
on October 30, 2001
This book does a poor job of explaining what caused the depression. It gives a sarcastic narrative of some of the bad practices leading up until 1929, and the sarcasm is amusing. After the sarcasm, in about february of 1930, it stops and draws unjustified and unsupported conclusions. The narrative comes mainly from reading the New York newspapers. A description of what happened in rural areas and at small banks is not included. You will not understand what a run on a bank is, and how small banks were leveraged and destroyed by the depression. You will hear nothing about the propensity of the federal reserve to keep interest rates too high from 1929 - 1933, and will not know how much they should have been lowered, or if lowering them would have been ineffective. You will not learn how to draw your own economic conclusions by reading this book. Because the book is 100% text, a large opportunity is missed to explain some of the economic history through pictures.
I think the book is popular because it was written by a Harvard Professor. I have read several books on the depression and this one, because of the hype, was the greatest disappointment.
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on April 29, 2000
Although not claiming to be able to predict a market crash, Galbraith tells the reader, "the phrases are the same: 'The economic situation is fundamentally sound' or simply 'The fundamentals are good.' All who hear these words should know that something is wrong" (Intro-XIV). He drills this into the minds of the reader, from the introduction till the end of the book. The last two words printed in the book are "fundamentally sound" (194). This must be one of his main points, as it seems to appear every five to ten pages.
Galbraith also seems to have a "holier-than-thou attitude" that is consistent throughout the book, and reminds me of "the blind leading the blind." He talks as if Americans are stupid and for them to try to figure out the market is way beyond their means. This can be clearly seen in the introduction to the book when he writes, "There is now far more money flowing into the markets than there is intelligence to guide it" (XII). He speaks as if he has it all figured out and we (the readers) are stupid to even try. The reality is that the Wall Street brokers don't have it figured out, either. The only reason they do any better than the average investor is that they are around to hear all of the whisper that surrounds the market. As far as I can tell, the market is like collecting baseball cards-it doesn't really matter how well or how poorly the company does as long as it is the hot item of the day. The brokers then put on a game face to convince the investor that they need their help in order to succeed.
Galbraith never ceases to amaze us as he pushes the limits even further. His personality is revealed when he writes, "To the typical female plunger the association of steel was not with a corporation... Rather it was with symbols on a tape and lines on a chart and a price that went up" (76). Be it too hard to believe, to the all-mighty, that a woman (in the 1920's) not be able to speculate a bright future for steel as America becomes a very strong industrialized nation. Galbraith then seems to contradict himself as his thesis of the book seems to be, "One of the pregnant lessons of that year will now be plain: it is that very specific and personal misfortune that awaits those who presume to believe that the future is revealed to them" (188). This implies that even he cannot predict the market, and thus no better than "the typical female plunger the association of steel was not with a corporation... Rather it was with symbols on a tape and lines on a chart and a price that went up" (76).
Another contradiction of his can be seen at the end of the book when he is explaining why the market crashed (the speculative bubble burst). First he says, "the high production of the twenties did not, as some have suggested, outrun the wants of the people" (173). Then he tells the reader that corporations had "acquired larger inventories than they later found they needed" (174).
He then goes on to explain the five weaknesses of the economy that were pointed out by the crash, and his reasons why a crash could and couldn't happen again. However, this is only in the last thirty pages of the book. The first 170 pages of the book deals with who said what and how their reputation was helped or hurt by those statements. This is all pretty boring stuff and not needed by my accounts. I view this as an attempt to fill a book. The only thing worth reading in this book is the last chapter: I found myself constantly falling out of focus while trying to read it. I view Galbraith as a true "Demagogue" that plays on the fears of others. This book was first published in 1955 during another economic boom on Wall Street. He seems to want to capitalize on the boom of the stock market by the subject of his book and his perceived appearance that he is all knowing about the subject.
I would give this book the lowest rating possible, as I thought that only the last chapter was worth reading. Even then, I found that he did not tell me anything that I did not already learn in American History (Patrick Goines). Although his time has come and gone, I find that the last laugh is on him as he was a dying breed. One thing that new age technology has brought us is the ability to trade stocks instantly and cheaply. The days of $50 + 1% commissions are over as America finds that a $7.95 stock trade with their own decisions work just as well.
The truth is that everyone in the market is at risk, and should not buy on margin or put in any money that they can not afford to lose. Anyone who buys this book to gain some insight as to how and why the market rises or falls is wasting enough money to place a stock trade. There is no easy way to make a quick buck and no sure answer. Although, Galbraith has seemed to find one easy way out as this book has been in print from 1955 to present.
The bottom line is that there is no answer to the market, and the only way to have a "sure thing" is to be on the market floor. This is because the traders make a commission on every trade. It does not matter whether the investor makes or loses money; he still gets his commission-high or low. Who cares? (As long as the volume keeps moving)
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on April 9, 2000
Galbraith has established himself as a great writer of fiction, second only to Angly's "Oh Yeah!", whom he cites heavily. My question is, why not publish Angly's original book instead?
As for as the Literacy of those who praise Galbraith, try spelling HABSBURG correctly! The name, when spelled with a P is meant as an insult, much the same as Farah-Khanzeer would be to Farakhan.
For the Facts, see Rothbard's book on the subject. At least Rothbard comes to the right conclusions that the Hoover GOVERNMENT caused the Depression, and the fdr GOVERNMENT needlessly prolonged it, emphasis on GOVERNMENT!
PS. I must appologize for giving this book a rating of ONE STAR. ZERO STARS is more like it.
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