Review of The Great Depression: A Diary
I thoroughly enjoyed this book. While reading it, I was amazed at the similarities between the 30's and our present dilemma. Here is a quick synopsis of the book and what the author thought:
1. The government has no idea what stimulates the economy.
2. Americans in bad times, always believe better days are around the corner
3. Government intervention may have hurt the recovery both in the Depression and the Great Recession.
4. It's best to stay out of debt, have an emergency fund, have some capital saved up. Having capital saved will allow an investor the opportunity to invest when prices are discounted. Prices for stocks, real estate etc. are usually driven past the point of natural supply and demand during boom and bust cycles. Buffet said it correctly, "Be fearful when everyone is greedy, and greedy when everyone is fearful."
5. During calamities, natural and otherwise, Americans are generous and helpful to their fellow countryman.
6. Beware of the "intellectuals" who give advice to those in power over us. Roosevelt had his brain trust that was made up of university economists. President Obama has his as well. These are the same people that came up with the stimulus package and the universal health care plan. Give me a guy that has run a successful hot dog stand and that has met a payroll any day. Alright, not all intellectuals are bad. I do like Art Laffer and Jude Wanniski and have read a couple of their books and felt like they understand how the real world works.
The old cliche is correct, "Those who don't pay attention to history are bound to repeat it." The author took this saying under advisement and read all he could about past recessions and depressions. We and our elected officials should do the same.
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