I am retired and take educated guesses on all things financial.

December 22, 2008

December 22,2008: Depression, Anyone?

Not that I suscribe to the next Great Depression surge that the media and some economists seem to actually wish for as another way to savage President Bush and his capitalist henchmen, the following quotes provide interesting historical perspective on how the last Great Depression was seen - or unseen:

September, 1929:
"There is no cause to worry. The high tide of prosperity will continue" - Andrew Mellon, Secretary of the Treasury.

October 14, 1929:
"Secretary Lamont and officials of the Commerce Department today denied rumors that a severe depression in business and industrial activity was impending" - New York Times.

January 13, 1930:
"Reports to the Department of Commerce indicate that business is in a satisfactory condition, Secretary Lamont said today." - New York Times

January 24, 1930:
"Trade recovery now complete, President told. Business survey conference reports industry has progressed by own power. No stimulants needed! Progress in all lines by the early spring forecast." -New York Herald Tribune

March 8, 1930:
"President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days." - Washington dispatch

March 24, 1930:
"The prompt return of huge speculation and the liberal manner in which earnings are again being discounted indicate that it will be difficult to quench the fires of stock market enthusiasm for long." - Barrons Magazine

May 1, 1930:
"While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States - that is, prosperity." - President Herbert Hoover

June 29, 1930:
The worst is over, without a doubt." - James Davis, Secretary of Labor

August 29, 1930:
"American labor may now look to the future with confidence." -James Davis, Secretary of Labor

September 12, 1930:
"We have hit bottom and are on the upswing." - Lames Davis, Secretary of Labor

October 16, 1930:
Looking to the future I see in the further acceleration of science continuous jobs for our workers. Science will cure unemployment." - Charles M. Schwab

October 20, 1930:
"President Hoover today designated Robert Lamont, Secretary of Commerce. as chairman of the President's special committee on unemployment." -Washington dispatch

October 21, 1930:
"President Hoover has summoned Colonel Arthur Woods to help place 2,500,000 persons back to work this winter." - Washington dispatch

November 30, 1930:
"I see no reason why 1931 should not be an extremely good year". - Alfred Sloan, General Motors Co.

January 20, 1931:
"The country is not in good condition." - Calvin Coolidge

June 9, 1931:
"The depression has ended." - Dr. Julius Klein, Assistant Secretary of Commerce

Then again, how many elite economists have predicted 16 of the last 3 recessions?
Even Warren Buffett has had it wrong. At his Shareholder Meeting in April of 2000, he said that "Current market conditions are as extreme as anything that has ever happened - probably including 1929." A bubble is not a depression.

Live long and prosper.

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