(no subject)

[randomness]

"In any case, during the same month [September 1929] reassurance came from still higher authority. [Treasury Secretary] Andrew W. Mellon said, 'There is no cause for worry. The high tide of prosperity will continue.'

Mr. Mellon did not know. Neither did any of the other public figures who then, as since, made similar statements. These are not forecasts; it is not to be supposed that the men who make them are privileged to look further into the future than the rest. Mr. Mellon was participating in a ritual which, in our society, is thought to be of great value for influencing the course of the business cycle. By affirming solemnly that prosperity will continue, it is believed, one can help insure that prosperity will continue. Especially among businessmen the faith in the efficiency of such incantation is very great."

--John Kenneth Galbraith, The Great Crash

Comments

[docorion.livejournal.com]

Yeah, I read that book recently also. Eerie; If I closed my eyes and changed the names, it was much more recent history, wasn't it?

[bedfull-o-books.livejournal.com]

At the annual meeting at my publishing company, the company president said that that book was actually one of our top sellers last year. Pretty good for a book written in 1954.

[achinhibitor.livejournal.com]

Especially among businessmen the faith in the efficiency of such incantation is very great.

It may well contain no more truth than "No, it doesn't make you look fat." But in the same way, not saying the incantation will surely lead to disaster.

[achinhibitor.livejournal.com]

Larry Summers just said:

We've recognized from the beginning that if you look at the pattern in the economy, it was clear that there were going to be sharp declines in employment for quite some time this year, that experience suggests that even strong policies, very strong policies like the ones we've enacted with the Recovery and Reinvestment Act, with the president's financial stability plan, with the president's measures to provide for refinancing of mortgages — that even strong plans take time, take six months or more, to have their impact on the economy.

So I suspect that the economy will continue to decline for some time to come.

I do think if you look at the consensus of professional forecasters, that consensus suggests a somewhat better performance towards the end of the year.