SEPTEMBER 21 2019
EXACTLY NINETY YEARS AFTER THE GREAT CRASH 1929.
The way I arrive at my weekly writing choice is a mystery. Somehow my hand and eye are directed to a certain book which becomes my assignment for the week: I don’t choose them: they choose me.
This week it so happened that I had promised a friend a book which dealt with an island she was going to visit in a few weeks, and, while looking for this paperback, my hand touched upon THE GREAT CRASH 1929 by John Kenneth Galbraith, economics professor at Harvard. I had been looking for it a few weeks ago, and remembered that this financial disaster happened exactly 90 years ago, and wondered whether the world is due for something similar.
So what did that great economist, J. K. Galbraith – Canadian-born, a graduate of Guelph – write about 1929?
The first half of the book deals with the stock speculation and manipulation that drove the market to ever higher records. Most of the shares were bought on margin, that is 10% down and the rest on credit. That works beautifully when the stock rises, and is disastrous when these shares fall. Here’s a line out of the book, “Never before or since have so many become so wondrously, so effortlessly, so quickly rich.”
Perhaps people were more gullible in those days: they believed the experts: investment funds were all the rage: they had increased eleven-fold between 1927 and late 1929. The great villains then were the Ivory Tower professors of economics, who claimed to have prophetic insight.
Professor Galbraith makes clear that we should never believe the predictions of both politicians and arm-chair economists. Here are some examples.
Dr. Joseph Stegg Lawrence, of the prestigious Princeton University, wrote, “The stage whereon is focused the world’s most intelligent and best informed judgement (lies in the universities)……..how much safer and wiser to let it be accomplished by the men of peculiar knowledge and wisdom.”
Indeed, it was the golden age of professors. Just before the great crash, Professor Irving Fisher of Yale – another bulwark of learning – made his immortal estimate, “Stock prices have reached what looks like a permanently high plateau.” On Tuesday, October 22, just a week before the real crash, Charles E. Mitchell, a well-known banker predicted that the decline has gone too far. On that most infamous day, October 29 1929, John D. Rockefeller came out of hibernation to publicly state that, “Believing that fundamental conditions of the country are sound, my son and I have for some days been purchasing sound common stocks.” Politicians were equally bullish.
Well……………In all, in about two weeks from October 29 1929 till November 13, the stock index closed down from 452 to 224, more than a 50 percent drop.
AND THEN CAME THE GREAT DEPRESSION, 1929-39.
To this day there is no reasonable explanation why this happened. What did happen is that unemployment reached 25 percent of the working force, at a time when there were no unemployment benefits and all municipalities and all government levels were cash strapped, so no welfare either. Just imagine the hardship!
Galbraith mentions that some people thought that after a period of 7 fat years, inevitably 7 lean years were to follow, but he dismisses that possibility. So, yes, we are really in the dark why suddenly everything came tumbling down: not only stocks, but also real estate prices, while dust storms played havoc with agricultural yields. In the end it was the 1939-45 WAR that cured the depression: millions were mobilized to fight and billions were spent to equip them with lethal weapons.
The depression was felt more severely in North America than in Europe. True, on the continent money was tight. My father-in-law, a minister in a large church, suggested a pay-cut, as contributions to his church were down. I remember to my shame how I piously helped a woman who had dropped her wallet full of change. While I gathered the coins, I had my foot on a penny: Oh, my sinful youth! In those days there were even half-pennies in circulation.
So what’s in store for us spoiled rotten Westerners?
Well, yes, it will be war again, but this time it will not cure hardship as it did 80 years ago in 1939. Already a real Climate War has been going on for decades, intensifying in the last few years: Our WAR against CREATION is now approaching its final and most lethal stage. This war – which also will involve conflicts between nations – really is the war to end all wars, because, in essence, it is war against GOD, in which we, sad to say, are often willing participants.
Warnings Galore.
I just read a review of Naomi Klein’s new book, On Fire: The (Burning) Case for a Green New Deal.
Robert Jensen, a retired professor of journalism, comments on this book: “The problem of climate change is bigger than the Great Depression. It’s bigger than war. The problem of climate change is the problem of how and whether human beings can live together sustainably on this planet.”
My comment: “If history is any guide, universal sustainability will never happen: it would mean a mass conversion, something impossible, because we, the latter day sinners, are the least religious of all people ever lived.”
Dr. Jensen again, “I can offer a real-life example, my late friend Jim Koplin. He once told me, in a conversation about those multiple, cascading ecological crises (a term I stole from him, with his blessing), “I wake up every morning in a state of profound grief.” He was neither depressed nor irrational but simply honest. Jim, a Depression-era farm boy who had been permanently radicalized in the 1960s, felt that grief more deeply than anyone I have known, yet every day he got up to work in his garden and then offer his time and energy to a variety of political, community, and arts groups that were fighting for a better world.”
Grief: how often have I mentioned ATONEMENT, public lament for the state of the World? Why are churches so afraid to start this? No better way to tell the world that they see the earth as holy!
Naomi Klein too mentions grief. She writes, “There is no question that the strongest emotions I have about the climate crisis have to do with [Toma, her son] and his generation—the tremendous intergenerational theft under way. I have flashes of sheer panic about the extreme weather we have already locked in for these kids. Even more intense than this fear is the sadness about what they won’t ever know. They are growing up in a mass extinction, robbed of the cacophonous company of so many fast-disappearing life forms. It feels so desperately lonely.”
WAR.
Talking about war again: The entire nature of warfare is changing: nature’s degradation is the result of human degradation, which is the result of folly, which has as its base SIN. The folly is especially visible in the USA, a country obsessed with MONEY and RELIGION.
Example: USA recently commissioned a new aircraft carrier, costing some 13 Billion Dollars, and still not functioning, because the elevators that are supposed to bring the bombs to the airplanes, don’t work. What’s a warship that lacks ammunition? A dodo.
Already that big machine, (costing more than the entire Canadian Defense budget), home to thousands of sailors and pilots and whatever, is already obsolete: simple drones, with a price tag of a couple of hundred dollars, can fly undetected, carrying lethal loads, as became clear in Saudi Arabia last week. Also new Russian anti-aircraft missiles are so advanced that the most advanced US aircrafts are sitting ducks for these guns: the Pentagon, with a budget close to One Trillion Dollar, has become One Trillion Dollar Waste. The real reason for this humiliation is the fact that Russian arms are far superior to American ones: the US arms industry develops weapons for profit while Russia produces them to defend itself.
Here is a prediction, which like all predictions, is about the future, and this non-predictable. Nevertheless one thing is beyond doubt: “Times are gonna to get worse.” Politicians shy away from painting the proper picture, but I am not: mentally and religiously and physically we have to face the consequences of our actions. Only prayer, only confession is the only option.
A unique view.
Here is an interesting take on the future, a reasonable guess what is in store. Gail Tverberg, who writes OUR FINITE WORLD, is an actuary, a person who works for pension funds and life insurance companies, in charge of making intelligent guesses about the future.
She, in her latest blog, looks back and ahead, back hundreds of years when falling interests happened, and then singles out the three latest in the last 200 years: from
- 1817-1854
- 1873-1909
- 1985-2019
In the gap between the first two takedowns in interest rates (1854 to 1873), the US Civil War took place. This was a period of very poor return on investments. Somehow it ended in war.
Immediately after the second takedown in interest rates (after 1909), the world entered a very unstable period. First there was World War I, then the Spanish Flu, then the Great Depression, then World War II with 100 million lives lost.
Now we are facing the possibility of yet another end-point for the take-down in interest rates.
She writes, “The total return of the economy seems to be too low now. This seems to be why we have problems of many types, ranging from (a) low interest rates to (b) low profitability for energy producers to (c) too much wage disparity.”
All of the problems listed above are manifestations of an economy that is not producing sufficient total return. The laws of physics distribute the problem to many areas of the economy, simultaneously.
Tverberg again, “A person wonders what could be ahead. We seem to be reaching the end of the line regarding the takedown of interest rates. If a takedown in interest rates is possible, it acts as a relief valve for some of the other problems the economy is facing, including too much wage disparity and energy prices that are too low for producers. Earlier in Section [10], we saw that when the relief valve of lower interest rates had disappeared, wars and depressions have taken place. We can’t know the precise outcome this time, but our current situation doesn’t look good. Will we encounter wars, or a serious depression, or financial problems worse than 2008? We can’t know for certain. Or will we somehow find a way around serious problems?
So far Gail Tverberg.
What she implies is that indeed hard, very hard times are ahead, based on historical data. We know that the US civil war still ranks as the most destructive for the USA. The period 1914-1945 is too well known, when 10% of the people living in 1900 died violently, some 100million lives lost.
Today the world faces problems beyond the wildest imagination. Already in July several tipping points were crossed in the Arctic. Have a look at ARCTIC NEWS where is says that, “In July 2019, a critical tipping point was crossed. July sea surface temperatures on the Northern Hemisphere were 1.07°C above what they were during the 20th century, as illustrated by above image which has a trend added that points at 5°C above the 20th century by 2033.”
Of course 5°C is far beyond the possibility of
LIFE: that will be reached within a few years.
NINETY YEARS AFTER 1929.
That’s how I started. The Finnish Prime Minister visited the White House a few months ago. He told the present occupant there that “When the ice in the Arctic is gone, we are gone too.”
He told the truth to the ultimate CLIMATE CHANGE denier, now working hand in hand with the Ultimate Evil One who, says 1 John 5: 19, “We know that we are children of God, and that the whole world is under the control of the evil one.”
Ninety years after 1929 we face the ULTIMATE DEPRESSION, when all planetary forces, economic, military, environmentally, spiritually, physically, band together to destroy God’s creation. That also means that THE KINGDOM OF HEAVEN IS COMING HERE!