Thought I’d plunge into a nice dry history book to forget my grief over George Harrison. What could fit the mood better than a bleak account of the stock market plunge of 1929? So there I am on Page 227, slogging through it, when who appears to rally the beleaguered investors? George Harrison, that’s who. Not exactly the same one—in this case, the head of the Federal Reserve Board under the Hoover administration. But still, his reincarnation offered consolation in a dark moment.
By the way, wasn’t the Rutles movie called All You Need Is Cash? As I recall, only George appeared—could this be the beginning of a new Beatles conspiracy theory?
The book in question, Rainbow’s End: The Crash of 1929, is the latest offering from Maury Klein, a business historian at the University of Rhode Island. Klein has succeeded better than most 19th-century historians at breaking out of the doldrums of the academic profession and writing books that appeal to lay readers. His last book, Days of Defiance, did surprisingly well—readably recounting the story of the phony war that followed Lincoln’s election in the fall of 1860 and heated up with the firing on Fort Sumter in April 1861. He has also written extensively on robber barons and railroads.
With this new offering, he’s jumping into both the 20th and the 21st centuries, for there are unnerving parallels between some of the conditions that he describes in 1929 and the current economic slump—finally upgraded to a recession by the people in charge of economic nomenclature. The book is the second in a new series from Oxford on “Pivotal Moments in American History,” which began with James Patterson’s fine book on Brown v. Board of Education. I’m always a little suspicious of these history marketing ideas—they can give off the stale odor of a cardboard exhibit for President’s Day at the local library—but it’s too early in the life of the series to pass harsh judgment.
What Klein offers here is more or less exactly what you’d expect—although frankly a bit less than I hoped for. In its factual way, the book gives context to the stock market nose-dive that ended the free-wheeling 1920s. There are all the connections one would hope for—the empowered position the United States enjoyed at the end of the Great War, the conditions that led to vast new sources of wealth and public participation in Wall Street’s adventure in the ‘20s, and finally the crash itself—harrowing not only for its merciless theft of life savings but for its enduring mystery, even 72 years later.
The explanations for the crash are slightly clearer after reading Klein (who dismisses the crash and Depression as an “aberration”), but not a whole lot. That, I suppose, is my chief complaint. Klein gives us plenty of what happened, but not too much why. There are diverting explanations of “air pockets” and other market abnormalities that led to the panic, but little in the way of an overarching theory for why the market collapsed when and how it did. I took away the sense that seven decades later (the equivalent distance between 1857 and 1929), we still don’t really know what caused it. Can that be right?
Another complaint is a bit unfair, but I’ll make it anyway. There’s not enough cultural history for my taste. Where are the flappers and the executives cheating on their wives and the crooked brokers with phony tips and the broken-hearted investors? There’s a bit of human drama here and there—some amusing episodes about Groucho Marx and his obsession with playing the market, a couple vignettes about Joe Kennedy (who got out at just the right moment, saving his dynasty), a couple of reflections on people who got burned, a discourse on flagpole sitting—but not enough to make the book really pulse.
Having complained, I’d also like to call attention to what I liked about the book. Klein excavates some interesting characters who played bit parts in the drama. Alexander Dana Noyes, the New York Times financial writer who sensed something wrong earlier than most. (In a hilariously prissy photo, he seems to have walked straight out of a Gluyas Williams cartoon.) Billy Durant, who pulled together the companies that became GM, only to go bust and return to Flint, Mich., to open up a bowling alley.
I enjoyed reading all the fatuous predictions by politicians and business leaders who assured the public that 1929 would be another banner year because the science of reading upwardly curving graphs proved that progress would continue forever. I also enjoyed their brainless insistence after the disaster that the market was enjoying a long overdue and healthy “correction”—the same sort of thing we hear whenever there’s bad news. Klein is also right to point out that the crash and Depression are separate events, and that the crash was more complex than anything that happened on a single day like Black Thursday—an impression fanned by countless yuletide rebroadcasts of It’s a Wonderful Life.
Inevitably, readers will want to reflect on the similarities between 1929 and 2001, and Klein gives plenty of food for thought. Certainly, there are interesting echoes between the ‘20s and the go-go 1990s. Just as we wired ourselves and bought deeply into the idea of a New Economy, so the nation wired itself (with radio and electricity) and believed in a “New Era” back then. Interestingly, the New York Yankees dynasty appeared to have peaked at exactly the moment of the crash—just as it now has.
Three days ago, George Will wrote a column insisting that the economy is not so bad, which of course made me think it must be much worse than I imagined. I’d be interested in hearing your more seasoned thoughts, Nell. I’d also like to reflect more on what the government should and shouldn’t have done to stanch the bleeding. Klein doesn’t do too much of that—he’s good on Hoover’s inertia, but he barely mentions FDR, whose impressive handling of New York state propelled him to the presidency. I’ll close with those questions and with this link to a recent article telling us the federal surplus is, like this book, history.