The Merval, Argentina’s benchmark equity index, soared 22 percent the day after the recent vote. Markets had been pricing in big electoral gains for the Peronist parties, only for Javier Milei’s market liberal Liberty Advances party to reveal unexpected strength.
The market surge in Argentina is a reminder that equities don’t just rally, nor do they correct or “crash.” They don’t because equity markets are relentlessly pricing knowns. It’s a reminder of what can’t be said enough: big market moves in either direction are an effect of new information reaching investors that force a rethink of equity prices that are always and everywhere a look into the future.
This basic, far from novel truth about equities and markets in general was sadly missing from Andrew Ross Sorkin’s new book, 1929: Inside the Greatest Crash In Wall Street History – And How It Shattered a Nation. The author’s choice to omit the meaning of market rallies and corrections, or for that matter a failure to understand their meaning, rendered 1929 much less than the near unanimously positive reviews of the book so far indicate.
While Sorkin has done a great job of gathering up a lot of interesting information about the people and personalities associated with the most famous of U.S. stock-market corrections, his energetic reporting glossed over why 1929 is the most famous correction. Which means the gathering of copious amounts of information will not enhance understanding of why the market correction happened, nor will it add to understanding of why the 1929 market correction continues to occupy the minds of readers in the way that 1987 (a 24% correction that doubled October 29, 1929’s 12.5% drop), 2001 (internet), 2020 (coronavirus lockdowns), and even 2008 do not.
What makes 1929 relevant today isn’t Sorkin’s history, but the legislative errors that followed and that turned a major market drop into a near decade long period of economic sluggishness. It’s a long way of saying that while Sorkin’s #1 bestselling book is largely about 1929 (to be fair to the author, he covers some of the aftermath), what to this day gives life to Sorkin’s 1929 is what happened after. Put another way, barring the egregious mistakes of intervention made by Presidents Herbert Hoover and Franklin Delano Roosevelt, the 1930s are a time of booming economic growth such that Sorkin has no book.
Evidence supporting the above claim can most notably be found in 1987. Stocks started to sputter earlier in the month of October, all of it leading to a monstrous, 24 percent correction on October 19, 1987. That’s the bad news, though the bad news largely ended right there.
The good news is that as 1987 closed, the DJIA ended the year largely flat. Ronald Reagan was president then, and Reagan’s favorite president was Calvin Coolidge. Like Coolidge, Reagan leaned toward non-intervention. The markets plainly preferred Reagan’s approach to that of Hoover and FDR, which means that the meaning of 1987 sadly shrinks by the year precisely because there was no brutal aftermath to a correction that varying market pundits attributed to Treasury secretary James Baker’s talking down of the dollar on the Sunday talk shows on October 18, 1987, rising protectionism within Congress (see Richard Gephardt most notably), separate legislation meant to substantially tax the M&A activity that had given equity markets so much life in the 1980s, along with the rise of “program trading.”
This review or analysis of Sorkin’s book won’t dig deeper into speculations about what may or may not have caused 1987, but the fact that 1987 doesn’t rate the ink spilled on 1929 should loom large in the minds of those reading this review, and more importantly, in the minds of the many who will read Sorkin’s book. Just as the meaning of 1987 sadly shrinks by the year, the jejune and errant meaning of 1929 sadly grows by the year, including in 2025 as stocks sit at or near all-time highs. It’s sad once again because to this day the lessons of 1929 elude most economists, historians and market pundits, and since they do, attempts to tie 1929 to 2025 invariably fail.
Sorkin opens 1929 with Charles Mitchell, the head of National City Bank (today known as Citibank), a financial institution that in 1929 was on the verge of becoming the U.S.’s largest bank. Sorkin writes of Michell participating in an “emergency meeting” at the New York Fed, during which he was “puzzling over how to calm the market.” Which means the book misanalyses right out of the gate, and not because Sorkin got the history wrong.
Where Sorkin erred was in his flawed analysis, or failure to raise an eyebrow to Mitchell’s actions. About markets, it can’t be said enough that they quite simply are, as opposed to them being “calm” or “stormy.” It rates stating repeatedly that prices are how the market economy organizes itself, and of crucial importance, markets gain strength from periods of weakness if those periods of weakness aren’t meddled with by bankers, central banks, or politicians trying to trample on the essential message of the markets via vain attempts to achieve “calm” when prices are trying to convey something else entirely.
If any of the above is doubted, readers need only contemplate the state of equity market play when the 21st century dawned, roughly 15 months before a brutal, lengthy stock market correction began. At the time, GE was the world’s most valuable corporation, Barron’s had crowned Tyco the next GE, Worldcom was in some ways the face of communications, Enron had the smartest and best executives, while Yahoo and AOL were seen as the gold standard of an internet boom that was transforming the economy and how we lived right before our eyes.
In looking back on the companies that reigned supreme just 25 years ago, readers might stop and contemplate the horrors of Wall Street’s best and brightest names working with central bankers and politicians to calm the eventual message of that market. What a disaster for the U.S. economy if the team picture of top U.S. corporations in 2000 resembled that of 2025, let alone 2005. Yet there’s more.
Right at the time when GE, Tyco, and AOL (a colleague at Goldman Sachs right around 2000, when asked what stock to buy, said he would buy AOL and hold it forever…) were seen as the bluest of blue chips capable of creating a robust retirement for all so wise as to own them and forget about them, Amazon was known as “Amazon.org.” Get it? As for Apple, it wasn’t much more than two years removed from near bankruptcy, while the Nvidia of 2000 was routinely 30 days from bankruptcy. Google was a largely unknown private company, and as for Facebook, it didn’t yet exist - Mark Zuckerberg was still in high school.
Hopefully readers see the point. None of this is meant to express contempt for Mitchell and his desires for calm where there was a storm, but it is to say that stock markets are a collection of individual companies whose fortunes are constantly moving up and down. The latter is a crucial sign of health as the once great that are now mediocre are ruthlessly replaced by former unknowns on their way up. Which means equity corrections are a sign of economic vitality, while broad market corrections caused by legislative error or expectation of same are similarly essential for progress: how else for CEOs, regulators and politicians to know they’re doing wrong, or for that matter, right? Sorkin plainly disagrees. Writing about a meeting between J.P. Morgan senior partner Thomas Lamont and President Hoover, Sorkin quotes Lamont (p. 195) telling Hoover that “corrective action on the part of public authorities or individuals need not at this time be contemplated.” The quote is meant to expose Lamont as the problem, as the person unwilling to encourage government intervention to push down market prices as though the discovery that investment implies is a bad thing, that rapidly rising equity prices are a cautionary and bad thing, and that intrepid investment is the path to economic malaise. Sorkin’s insinuation is wholly backwards. Goodness, think how unknown and unimportant Amazon, Microsoft and Nvidia would be today without endless experimentation within each over the decades that has periodically brought with it a correction in the shares of each.
The problem yet again is that the healthy message of the market gets short shrift in 1929. Much worse, and as indicated in the previous paragraph, Sorkin uses rising equity markets along with optimism about those same equity markets as props for readers, as though optimism foretold an equity correction and subsequent economic carnage. He cites Groucho Marx’s broker as saying RCA (the Apple and Google of its time – Mark Mills, The Cloud Revolution - review here) is a stock that is “going to keep going up and up and up (p.15),” market astrologer Evangeline Adams’s proclamation that “the Dow Jones could climb to heaven (p.163),” economist Irving Fisher’s much-quoted speech in which he said “stocks have reached what looks like a permanently high plateau (p. 192),” along with Charles Mitchell’s assertion (p. 171) that “there is nothing to worry about in the financial situation in the United States.”
In response to this review’s suggestion that the optimistic quotes are being used by Sorkin as a prop to foretell troubles ahead, Sorkin himself might respond that he also quoted the bears. And it’s true that he does. On p. 55 he writes of how Charles Merrill “had been telling clients to get out of the stock market since March of 1928,” he quotes Thomas Lamont’s quip (p. 146) that “In my spare moments, I keep feeling cash is a good asset,” famed bear Jesse Livermore’s October 21, 1929 lament (p. 198) about “ridiculously high prices,” not to mention a New York Times report from March of 1929 (p. 85) which observed that “the people who know least about the stock market have made the most money out of it in the last few months.” Ok, but assuming the Times had it right about the dumb money having made the most money in 1929, that signals that the smart money had already sold.
The main thing is that far from a sign of ill economic health, bull markets that Sorkin simplistically reduces to wild-eyed exuberance and “bubbles” are in truth what George Gilder describes as “growth spasms.” In other words, the U.S. economy would be even more prosperous if there were more, not fewer periods of soaring equity prices born of investor excitement about advances (the proliferation of radios plainly loomed large in the 1920s) in the economy that invariably leave behind a little or a lot of wreckage. The frenzied investment is producing the brilliant wealth that we know as information. And while sometimes much of the investment results in lots of dry holes (think the internet bust in 2001), we’re still much better off and much more poised to grow precisely because we know so much more.
Not so to Sorkin. Which in a very real sense confirms this review’s assertion that he quoted the bulls in all their rapture as a prop, as a foreshadowing of bad times ahead. That’s because Sorkin himself sees bullish periods in a pejorative light. In his words, (p. 14) “Optimism becomes a drug, or a religion, or some combination of both.” To Sorkin, optimism foretells correction or “crash,” which is overly facile. Figure that optimists can only express their optimism in the marketplace insofar as there are sellers getting out of the market. Which Sorkin never addresses. He writes throughout 1929 as though bullish periods were defined by markets solely populated with buyers, of “pools” buying in size to push stocks up…Hmmm. Whom did the “pools” buy from, why would the sellers sell into so much buying power (were the pools actually the “dumb money”?), after which we can ask why the massive pools described by Sorkin himself couldn’t prop up shares in 1929? The Manhattan Institute’s Judge Glock cheered Sorkin’s gentle nature with people like Mitchell in his review of 1929 at the Wall Street Journal, but underlying Sorkin’s situational evenhandedness was analysis meant to give the reader the impression that equity markets are populated with more than a few malevolent forces manipulating their direction, and worse, people moving money over real wealth. Please read on.
Early in 1929 (p. 12) Sorkin writes of how “Wall Street became like a giant balloon floating above the common people" in the 1920s, and then on p. 119 while writing about former DuPont and GM executive Johnny Raskob, Sorkin writes that Raskob, “like so many others,” took “his wealth and threw it into the stock market, where he amassed more money than he had earned in the corporate world,” and then on p. 391 in the aftermath of the 1929 correction, Sorkin writes of Thomas Lamont “exuding the kind of self-assurance that had once been common among Wall Street titans.” Let’s start with the comment about Lamont: what Sorkin leaves out, but that anyone then or now could tell him, is that Wall Street executives are prominent precisely because their clients off the street are much more prominent. In the Goldman Sachs of 2025 (as was the case with the House of Morgan in 1925), the Partners are getting rich and earning impressive annual sums precisely because the rich individuals, institutions (including hedge funds), and corporations they’re serving are becoming exponentially richer.
Which answers Sorkin about Wall Street as the “giant balloon floating above the common people.” Wall Street only thrives insofar as major corporations that employ the common man in growing numbers are truly thriving. Lest Sorkin forget, the public floating of Ford Motor Co.’s (Ford the corporation that introduced the then revolutionary $5/day wage to stop 371% annual turnover) shares by a still up-and-coming Goldman Sachs in 1956 established GS as a big-time player. Investment banks and banks serve the bigger players, and the previous truth hopefully answers the quip about Raskob. He didn’t get rich by doing the easy work of gambling and “throwing money into stocks” as Sorkin alludes, but via lots of sleepless nights ahead of investments that could just as easily have failed as succeeded. In truth, many more would have failed. And that’s because stock markets are invariably top heavy such that the very few highflyers obscure the many more equities not skyrocketing upward, or in full decline.
About the margin buying in the 1920s that plainly unsettled Sorkin as he looked back, he writes about how (p. 43) margin loans had grown from $1 billion in 1920 to $6 billion by 1929, thus “inflating the market into what many now feared was a dangerous bubble.” Not really. Margin buyers could once again only attain the shares about which they were giddy insofar as there were pessimists willing to sell to them.
Yet the biggest problem beyond Sorkin’s unwillingness to see the essential growth born of discovery inherent in investor optimism is in his implied commentary that soaring equity prices signal something much worse ahead. Exuberance is paid for with pain in Sorkin's analysis, or as he wrote on p. 407 toward book's end, the entrance of government to fix the alleged excesses of the 1920s with misguided legislation like Glass-Steagall meant that "Wall Street was never going back to the good old days." Yes, the "hangover" narrative as though market booms are little more than a night of drinking. Nothing could be further from the truth. Investment is what powers economic growth contra the consumption-obsessed economists whom Sorkin interviews on CNBC, which means the more investment there is and the more bullishness there is, the bigger the economic leaps.
The simple, crucial truth is that investment is once again about discovery. Important about the discovery is that some of the best ones are those that result in failure. As CalTech professor Carver Mead long ago conveyed to George Gilder, he and his colleagues never celebrated the experiments that succeeded. All the successes did was confirm knowns, meaning there was no wealth to be had in the realization of them. What Mead and his colleagues searched for, and what the commercial giants of today (let’s say Gates, Bezos and Huang) search for is information that’s an effect of relentless failure. While the best traders on Wall Street are right 51% of the time, Gates, Bezos et al are taking exponentially bigger risks (again, Wall Street looks up to the proprietors of businesses that form on streets that look a lot more like Main, but frequently quite a bit shabbier) that fail at much higher rates. This requires mention in consideration of Sorkin’s lament near book’s end (p. 439) that on the way up to October of 1929, there had been “plenty of opportunities to arrest the forces of speculation before they got out of hand.” Really? How? Seriously, who are or were the wise men capable of substituting their intensely narrow knowledge of the markets for the information machines that were the equity markets themselves? More important, what good could come from such intervention?
Of course, assuming an ability for the wise of government or whatever to “arrest the forces of speculation,” contemplate the immense costs associated with such small-minded thinking. Without intrepid investment, there quite simply is no progress. In other words, it’s certainly possible some other could slow the stock market down on purpose (legislators have done this and will continue to do this), but only at the expense of enormous amounts of wealth not created, and even greater amounts of experimentation that never takes place. In short, the unseen of Sorkin’s unrequited laments is enormously harmful, but plainly lost on Sorkin.
After that, the economy is global. Assuming efforts to arrest the speculation that gives Sorkin the vapors, it’s also perhaps lost on him that the speculation would simply and easily find a new address. Considered in modern terms, while American ownership of China-based companies is largely illegal in China, the vast majority of China’s greatest companies (technology companies in particular) are American-owned…Yes, the U.S. political class’s demand that TikTok find “American owners” thoroughly insulted stupid. Money finds the industrious. Always. And it frequently chases the industrious. Contra Sorkin, thank goodness it does on the way to occasionally monstrous failures without which there can’t be success.
From there, the challenge with Sorkin’s analysis is that simple economics or empirical realities run over it. About personal debt in the 1920s, Sorkin writes (p. 11) of how Americans “no longer had to save for the goods they wanted.” Again, a pejorative to Sorkin. Except that debt is a bullish effect of production. That’s why there’s a lot of debt in the U.S. and very little in Haiti. Not only is credit produced (we borrow money not for the money, but for what the money can be exchanged for), it’s generally only accessible to those who have the means to pay it back. Applied to Sorkin, it’s a safe bet that he can borrow a lot more in 2025 than he could as a Cornell grad in 1999. Americans could borrow heavily in the 1920s because they were producing impressively. Again, Wall Street doesn’t float above Main Street as much as its prosperity signals much greater growth outside of lower Manhattan.
Sorkin writes that debt “draws the wealth of tomorrow into the present.” No, it does not. Debt shifts the wealth of the present (again, we borrow money for the goods, services and labor it can be exchanged for) to those seen as having good prospects for turning the wealth of the present into greater wealth in the future. Why else would those with wealth lend it out (or invest it) unless they felt they could get initial capital outlay plus interest and/or substantive returns back in the future? In answering the previous question, consider the remarkable power of compounding and by extension the massive costs associated with subpar returns or losses altogether.
Which brings us to the Fed. Sorkin spends a lot of pages on the central bank, including lines like “Wall Street was worried that if the Fed made a mistake, it could snuff out the boom.” Once again, how? Credit is produced globally for one, and for two, the Fed’s creation was partially as a backstop for New York money center banks that saw their lending market share in rapid decline. While banks as a source of credit are much less consequential in 2025, their power over credit flows was hardly absolute in the 1920s. Notable here is that Sorkin’s own history vivifies the reality that the Fed is far more a legend in the mind of pundits than it is in reality. On p. 295, and in the aftermath of the 1929 correction, Sorkin quotes no less than Charles Mitchell blaming the correction not on a “tight Fed,” but on “credit pouring in from outside the banking system.” So, while it’s difficult to countenance Mitchell’s explanation, it’s useful as a way of pointing out that credit goes to where it goes without regard to the Fed and its member banks. Say it repeatedly, the Fed is just not that important now and it wasn’t in the 1920s.
Consider William Durant, a substantial car man (GM) and investor whom Sorkin returns to with great frequency. Sorkin writes of Durant going on the radio (p. 127) in April of 1929 to ask listeners if they were “in favor of the policy of the Federal Reserve Board in restricting credit and compelling banks to discriminate against stock exchange collateral?” The answer then as now was and is that banks are far from the only game in town on the matter of finance. Which seemed to be the underlying market response. Despite so-called Fed tightening, the only “closed economy” was and is the global economy. Sure enough, we find out in the subsequent chapter on Johnny Raskob that the Dow Jones Industrial Average (DJIA) was up 9 percent in April (p. 132), and right at the time that Durant was claiming the Fed had cost investors hundreds of millions. Better yet, stocks continued to climb. Which is the point.
The stock market reflects reality, not what central planners desire. That’s why stocks collapsed in 2001 despite relentless Fed rate cutting begun in 2000, and similarly collapsed in 2008 despite substantial rate cutting begun in 2007. The Bank of Japan was at zero for how long? And it was at zero as stocks traded at half of where they were well before the BOJ taught the Federal Reserve how to be ridiculous. Which is really the point. The focus on central banks is seemingly great for CNBC ratings, but it’s background noise as reality inevitably pushes itself into view. Stocks are reality, that or the most realistic look into the future. That’s why they rallied amid 525 basis points of Fed hikes beginning in March of 2022. How could they not have soared with the realization of an AI-informed future?
Looking back 100 years ago, RCA wasn’t just Google and Apple, it was in some ways Nvidia too. Despite this, Sorkin shockingly and maddeningly spent lots of time on the Fed and its alleged ability to “snuff out the boom,” and quite a bit less on what the bluest of chips (including RCA) were doing in the 1920s, and why investors were so giddy consequently. Sorkin could have pointed out that while no one had heard of a radio when 1920 began, by 1922 radio set, part and accessory sales had risen to $60,000,000, and to $842,000,000 by 1929. And while there were 7 million passenger cars in the U.S. in 1919, by 1929 the number had increased to 23 million (source for both stats: Frederick Lewis Allen’s Only Yesterday). More than most are willing to admit as they throw bouquets at Sorkin about his “definitive” book, a careful read of it reveals the author’s analysis as something much less, perhaps “you didn’t build that,” 1929 edition.
Beyond Sorkin’s not-so-original efforts to tie the 1920s stock market to an easy Fed over American ingenuity, he similarly writes as everyone else does about the Fed’s alleged ability to manage the U.S. economy. We see this in his discussion of New York Fed president Benjamin Strong (1914-1928), and the hoops he went through (p. 40) to “stabilize the economy.” Again, how? An economy isn’t some blob or machine that wise central bankers can dial up or down, it’s a collection of individuals. Where it becomes more frustrating is that Sorkin ties Strong’s actions to the recovery from the early 1920s downturn. Which is Sorkin getting exactly backwards why the 1920-21 recession in so many ways wasn’t, as the speed of the recovery attests. It was all about a do-nothing federal government (yes, a positive), including a government that did less than nothing in a spending sense (it was slashed). As Benjamin Anderson pointed out in Economics and the Public Welfare: A Financial and Economic History of the United States, 1914-1946, while federal expenditures (p. 92) were $6.4 million in 1920, they fell to $5.1 million in 1921. By 1923, they were $3.2 million. THIS is the proper response to economic downturns whereby crucial wealth isn’t consumed by governments as Sorkin argues for in his Afterword (he describes Herbert Hoover as the wise man in the “hapless Harding administration” because Hoover was “advocating for public spending,” p. 442), and is instead left in the private sector where it can be moved to its highest perceived use. Sorkin’s book is getting raves, but how can it be when the underlying economics of it are so at odds with how prosperity reveals itself, or not?
So, what caused the stock market to correct in 1929? To presume to be able to know the infinite informational inputs that go into what is a “market” reads as the most foolish of foolish errands. Certainly Sorkin gives the impression that a market (p. 196) "built on easy credit," combined with the “drug” of optimism that only a “crash” could bring back to reality was the main story, but such a view is yet again simplistic. Instead, one thing that stands out is that per Sorkin on p. 269, Hoover himself viewed the Smoot-Hawley tariff as “vicious, extortionate, and obnoxious,” but by October of 1929, news accounts began to signal a willingness of Hoover to cave on record taxes to be levied on 20,000+ foreign goods. Crucial about the timeline is that while Hoover signed Smoot-Hawley into law in 1930, always forward looking markets never wait to price a result they know in advance. Which is a long way of saying that as it became apparent that Hoover would eventually sign a bill that would tax the very division of global labor that always and everywhere powers enormous progress, the markets corrected to reflect this unfortunate legislative error ahead of it becoming law. And unfortunate it was. Sorkin quotes J.P. Morgan’s Lamont yet again about Smoot-Hawley, and how in his own recollection (p. 269), “I almost got down on my knees to beg Hoover to veto the asinine Smoot-Hawley tariff.” Markets hate tariffs because markets love the division of labor that powerfully pushes productivity upward.
Still, and precisely because markets are a look ahead, they can as mentioned previously act as information par excellence for corporations and politicians about what to not do. Except that the message of the market was ignored.
Hoover as mentioned did sign Smoot Hawley into law, and quoting Sorkin about Hoover (p. 67), he “was an engineer” who “believed the economy could be operated like a machine.” This ultimately revealed itself not just in economy-sapping tariffs, but rising government spending opposite the genius of 1920-21 such that an economy starved for capital had to compete with government for it, demands that businesses keep wages at 1929 levels (thus limiting the ability of businesses to hire at dated prices), along with tax rates that eventually climbed to 63% at the top level.
Sorkin mistakenly asserts that the market correction in 1929 “led to the longest economic malaise in U.S. history,” which is bad history on his part. Again, stock market corrections, if left alone, are the cleanse signaling a recovery in progress. So-called “recessions” are no different. Though painful, they’re painful in a good way exactly because they signal the realization of errors that personify economic rebound. But instead of learning from Hoover’s various legislative mistakes that turned what should have been a brief downturn into much worse, FDR doubled down on Hoover’s errors with the top tax rate rising to 83%, a tax of up to 74 percent on undistributed profits, substantial re-regulation of a farming sector that still accounted for close to half of the U.S. economy, soaring government spending, not to mention a devaluation of the dollar. About the devaluation, it’s never discussed in conventional histories like Sorkin’s that investors, when they put wealth to work, seek returns in money, in our case the dollar. Translated, devaluation is a tax on the very investment that powers all economic growth.
FDR made countless other mistakes beyond the ones mentioned, as did Hoover, but the bigger, overarching point is that as opposed to an effect of a stock market correction, the 1930s downturn was a logical and tragic effect of governmental attempts to shield Americans from the very economic downturn that, if left alone, would have set the U.S. economy up for powerful growth in the 1930s. Naturally, none of this makes its way into Sorkin’s book. A thoroughgoing Keynesian, it just doesn’t occur to Sorkin that government is, or could be the problem. Conversely, he can’t or is unwilling to correlate for readers the positive economic effects of do-nothing or do-little governments. Which speaks to the problem with 1929, one that can be easily diagnosed in Sorkin’s contrasting descriptions of Calvin Coolidge and his successor in Herbert Hoover.
Writing about Coolidge early in 1929, Sorkin (p. 66) describes Coolidge’s “style of governance” as “taciturn, aloof and minimal,” and then on p. 69 writes of “his presidency coinciding with the roaring twenties.” The passages about Coolidge in many ways explains why Sorkin’s book, while surely interesting history (particularly for those unfamiliar with the time and people who helped shape it), fails substantially as a document that explains what happened not just in 1929, but before and after. That’s because there was nothing coincidental about the roaring twenties happening during Coolidge’s presidency. It’s what happens when the individuals who comprise what we call an economy are left alone. Which is a hint to Sorkin, but his readers most of all, that the 1929 stock market correction wouldn’t have happened on Coolidge’s watch precisely because governance that is “taciturn, aloof and minimal” brings with it none of the legislative surprises that lead to substantial market lurches.
Contrast Coolidge with Hoover, someone the thoroughgoing interventionist in Sorkin tries to revive the reputation of. On p. 308, Sorkin quotes the engineer “who believed the economy could be operated like a machine” as lamenting to an aid that “fighting this depression is becoming more and more like fighting a war.” There you have it. Hoover, like Sorkin, believes government has resources to make good what’s bad. Except that it doesn’t. Government can only do things insofar as the RCAs, Fords and GMs of the world have less to do with. Worse, government is not infrequently in the business of propping up what should be allowed to fail to the detriment of the RCAs, Fords and GMs, and exponentially more problematic to progress, to the detriment of the would-be replacements of existing and former titans. Simply put, every governmental action meant to fight recession just elongates the pain of same by extending the pain of what would be short if nothing was done.
Which brings us to Andrew Mellon, a figure largely demonized by Sorkin, but who grasped reality in the way that Sorkin and nearly every 1920s and 1930s historian still doesn’t. Mellon’s solution to the economic downturn that took shape after the correction was to get out of the way, that allowance of the near-term carnage would “purge the rottenness out of the system.” Yes, precisely. Recessions and market corrections signal economies and markets on the mend, and that for being on the mend, are about to take off. Tragically Mellon’s advice wasn’t heeded, and how we know it wasn't heeded can be found in Andrew Ross Sorkin's book, a 444 page monument to the ongoing truth that historians still don't get 1929 precisely because they don't grasp what preceded and followed it.
