Columbus: The coronavirus is expanding, just as the medical experts predicted. Besides the medical damage (hospitalizations and deaths), it is strangling the economy. By the time you read this, the stock market may have lost a third of the high value a couple of months ago and millions are out of work.
How does the response by President Trump and Congress compare to the response in 1929 by President Hoover and a Republican Congress?
Well, night and day. In 1929 it was mostly no action, except for the Smoot-Hawley Tariff Act in 1930, which made the Depression even worse. In 2020 the Republicans are quickly pumping about Two Trillion (borrowed) dollars, yes Trillion, into the economy.
Here’s a bit of history. The Stock Market crash in 1929 began Oct. 24. By Oct. 29 it had dropped 25%. By the time the Dow Jones average bottomed out in 1932, stocks had lost 85% of their value. The election of FDR gave a temporary boost until 1937 when it dropped again. If I’m reading the charts correctly, the Dow did not climb back to the 1929 peak until 1954.
Below are a few insightful comments by Will Rogers on President Hoover, Congress, businessmen and bankers.
Note: Will Rogers did not own any stock, following the advice of Bernard Baruch. He invested in land instead.
Historic quotes by Will Rogers: (from Daily Telegrams, Oct-Dec, 1929)
“When Wall street took that tailspin, you had to stand in line to get a window to jump out of.” Oct. 24
“When the stock market goes down Mr. J. P. Morgan [and other prominent New York bankers] hold a meeting and let everybody see them in this huddle. Then the market perks up… It would be a great idea if we could just get these boys in a room together for six months. There is no telling to what heights the market might go.” Oct. 29
“Sure must be a great consolation to the poor people who lost their stock to know it has fallen in the hands of Mr. Rockefeller, who will take care of it and see that it has a good home and never be allowed to wander around unprotected again. There is one rule that works in every calamity, the rich get richer and the poor get poorer.” Oct. 31
“Mr. Hoover is becoming disgusted with the Senate… he took ‘em serious, thereby making his only political mistake.” Nov. 1
“All the big financiers are saying ‘good values are worth as much as they ever were,’ but that’s the trouble, nobody knows what they were ever worth.” Nov. 8
“Prosperity this Winter is going to be enjoyed by everybody that is fortunate enough to get into the Poor Farm.” Nov. 14
“America already holds the record for freak movements. Now we have a new one. It’s called ‘restoring confidence.’ Now I am not unpatriotic and I want to do my bit… But you will have to give me some idea of where ‘confidence’ is. And just who you want it restored to.” Nov. 19
“Wall Street stocks are about back up to where the suckers can start buying again.” Nov. 27
“Poor Democrats, I love ‘em. I guess because some are so dumb. Now they are dying to scare up an issue by trying to discredit Mr. Hoover.” Dec. 23
“Passed the Potter’s Field yesterday and they was burying two staunch old Republicans, both of whom died of starvation, and the man in charge told me their last words were, ‘I still think America is fundamentally sound.’” Dec. 25, 1929