american-century-investments

I was pleasntly suprised by this volume from John Hood. I had not read anything by him previously, though I had heard him on the radio and was impressed by the good work of his John Locke Foundation here in N Carolina.

I say suprised because the subtitle led me to believe that the book was primarily a study of the effect that a growing class of american investors is likely to have on future US policies. What I found instead was a history of the relationship between govetnment and investing from prehistoric times to the present.

Fortunately Mr Hood doesn't get bogged down in some of the dead ends which such a history might entail if followed too rigorously, such as the common opposition to the charging of interest on loans throughout medieval Europe. He gets pretty quickly to US history where his strengths shine through.

A fair chunk of Investor Politics studies the history (and future) of the Social Security Administration, and is honestly the most even and thorough discussion I've seen. His recommendations for policy reforms are carefully thought out and backed by numerous, well explained studies.

My reasons for not giving a fifth star are that te book seems to bite a bit more than it can successfully chew, and its somewhat deceptive nature as I described above. But those things aside, the book is quite an exceptional balance between historical research, clear and simple explanations, and sensible policy prescriptions.

Klein's retelling of the story of the stock market crash of 1929 is just too little and much too late. Other books, notably Only Yesterday by F.L. Allen for anecdotal material and The Great Crash of 1929 by J. K. Galbraith for analysis, go over the same material and do a better job. Klein's book does have some strong points: wonderful vignettes of some of the people, big and small, who were caught up in the crash; a good analysis of why Herbert Hoover, "the great engineer," couldn't engineer his way out of this one; some interesting anecdotal material I haven't seen anywher else. But all of that could have been done in less than half the space. Nice try, but no cigar.

Maury Klein, in his book Rainbow's End: The crash of 1929, has given us a blend of a newer style of historiography with the traditional sense of examining historical events. He has given us a look at the Stock Market Crash of 1929 through the eyes of the people that participated, rather than looking at it strictly from an economic or political historical viewpoint.

Klein starts his book with a description of American society in the 1920's and explains to us why the society of excess and speculation led to the crash moreso than a failing of the general American economy. By dotting the landscape with characters, some familiar and some unfamiliar, Klein gives us a good portrayal of the times.

There is, unfortunately, only a short section of the book that actually deals with the events of the crash itself. This section focuses the days between Black Thursday and Bloody Tuesday, which culminated in a horrific period of losses in the market.

Klein does a good job of staying on task during the sections of the book in explaining the economic factors and the behind-the-scenes actions that took place during these few hectic days. He does not, however, explain the immediate social ramifications (such as the fact that people who lost everything gave up on life) as well as might be expected; he gives this facet of the crash only peripheral coverage.

I would recommend this book to anyone that is looking for a socio-economic history of America during this 1920's. It does a very good job of covering this topic. However, if one is looking for details just on the crash itself and those few terrible days on Wall Street, that reader would be well served to find another book to read.

"No era ever vanished so suddenly, so completely, as the
twenties." -- -- David Dempsey, _New York Times_, Feb 15, 1970

This is a quick run-through of the Crash, with a little pop-sociology about America in the Twenties. It's eerie, reading quotes from bankers, politicians, and brokers from the months before the Crash, about how the market had become so modernized and shockproof that panics were now impossible. Sounds familiar...

New York Times financial columnist Alexander Noyes is a primary source in this book. It is fascinating, watching these titanic events being filtered daily through this not-stupid man's pen. We've heard more than 70 years of second-guessing about the Crash by now, so it is interesting seeing how it was taken point-blank by analysts at the time.

In Maury Klein's account, the Crash is nobody's fault. Like Stanislaw Lec once said, every snowflake in an avanlanche pleads not guilty. Big brokers ostentatiously placed big orders, hoping to spur rallies. Consortia of financiers struggled to maintain public confidence in the market. President Herbert Hoover-who as a humanitarian first and failed President second was Jimmy Carter in reverse-tried to get Big Business together in a game plan to retrieve the situation. But in a free market, there is no one pulling levers and hauling cables controlling things. There was no one to stop the free market from going into freefall.

Throughout the book are amusing little vignettes, like the man who sat smiling in his broker's office throughout Black Monday. His termagant wife wouldn't be able to nag him about the neighbors doing better in the market than him anymore...