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« Keynes on Professional Money Managers | Main | Good Commentary »
John Kenneth Galbraith
Posted by Chris Farrell on Wednesday, January 16, 2008
I found this something of a chilling summary. The legendary investor Dean LeBaron notes on his website that John Kenneth Galbraith's classic account of the Great Depression lists five major weaknesses of the U.S. economy in 1929: an unequal distribution of income; bad corporate governance; a weak banking structure; a 'dubious' balance of trade position; and bad economic advice.
Sound familar?
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Comments (1)
January 17, 2008 10:32 AM
Not only that, but the Great Depression followed on the heals of two speculative bubbles. The first being the real estate bubble that collapsed in 26 (or 24 or 25, I don't recall which), and the second being the famous stock market bubble.
Bubble type speculations seem to occur largely when there is large wealth or income disparities. Those at the top end up having so much money that they cannot spend on consumption (I am not a fan of consumerism, though!), so they chase investments at an ever increasing pace of an increasing dubious nature. If there is no other reason for redistributing income downwards, the effects of these dramatic market bubbles and collapses should be enough to warrant such a distribution (which would likely affect me as well).