Essay on The Great Crash 1929 Book Review - 1602 Words

It is often said that perception outweighs reality and that is often the view of the stock market. News that a certain stock may be on the rise can set off a buying spree, while a tip that one may be on decline might entice people to sell. The fact that no one really knows what is going to happen one way or the other is inconsequential. John Kenneth Galbraith uses the concept of speculation as a major theme in his book The Great Crash 1929. Galbraith’s portrayal of the market before the crash focuses largely on massive speculation of overvalued stocks which were inevitably going to topple and take the wealth of the shareholders down with it. After all, the prices could not continue to go up forever. Widespread speculation was no doubt a†¦show more content†¦This is not to say that people with less money will always throw out their inhibitions in order to achieve great financial wealth. People must be told that it is ok to venture outside of their safe zone and know th at what they are doing is right. Americans in the late 1920s received plenty of this type of encouragement from political leaders and assumed financial experts. Galbraith mentions the optimism of Calvin Coolidge as he was leaving office, the commitment of bankers such as Charles E. Mitchell to keep the boom going, and the ingenuity of John Jacob Raskob to include the average person in the market. He even points out Irving Fisher’s assumption that â€Å"Stock prices have reached what looks like a permanently high plateau.† The lay person already infected with the belief that anyone could get rich in the market now had the financial means and the support of informed intellectuals behind them. The choice to buy on margin seems to have been forgone conclusion to these people who were now buying into the dream everyone was selling them. The ability to gain a taste of the riches at a 50% or even possibly 75% discount in a bull market could be too much for any competent pers on to pass on. An individual with slightly more money might find the opportunity to double his profits as well given the situation. The author blames the low margin rates on the Federal Reserve, who inShow MoreRelatedDecade of Despair: Winnebago County During the Great Depression by Werner E. Braatz and Thomas J. Rowland1524 Words   |  6 Pages The book I have chosen to review is Decade of Despair: Winnebago County During the Great Depression 1929-1939. Authors are Werner E. Braatz and Thomas J. Rowland. Copyright 2009 by University Press of America. Published Lanham, Maryland 20706. ISBN-13: 978-0761846406. The stock market crash of October 1929 drastically affected the economic growth of the entire United States. 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