So what comes next? If the various national and global financial rescue initiatives have, as some argue, staved off collapse, what sort of economy are we looking at for the next year or two?
As noted in our previous blog posting on the financial crisis, even optimistic projections about what's coming up are not, well, optimistic. The Financial Times newspaper reports today that the current thinking of economists is that collapse of the system has been averted and we're not headed for another depression; nonetheless, says the FT, we could be in for the worst recession since 1982.
We won't try to predict what will happen here; that's for others to do. But we did take a look into the archives of The Commonwealth magazine and found one of the earliest Commonwealth Club speeches reacting to the stock market crash of 1929. Titled "The Panic of 1929," the December 6, 1929, speech by William C. Van Antwerp of E.F. Hutton, offered some initial reaction to the market panic and included some surprisingly thought-provoking ruminations on the human spirit.
Here are some excerpts from Mr. Van Antwerp's speech:
A panic is a state of mind in which fear supplants reason. It cannot be stopped by statute law or arrested by the police. The best that can be said of such a phenomenon is that it doesn't occur very often.
In the panic of 1907, there were fundamental conditions that were not sound -- in 1929, we merely suffered a case of nerves following a debauch. It is not to be expected that sound and conservative industry will be shaken this time.
This present panic had its roots back in 1917, when our masses found that they could invest money in bits of paper called Liberty Bonds. From investing to speculating was an easy step.
Whether it be public excess, saxaphones or modern art, the American public always goes too far. If we emerge from our excesses somewhat sadly, we are also somewhat wiser.
The stock market was running wide open and good judgment was forgotten. Most of the post-mortem warnings we now hear about were never given until after the panic occurred.
The recent rise had to stop in one way if it did not in another. Even a billion dollar pool would not have averted the panic.
We have for some time been "rotten rich" -- now for a short time we are to be merely "affluent."
President Hoover will bring into action the confidence reserves which everybody knows we possess. When we start forward again as we surely shall, trade and prosperity will go forward to heights not now imagined.
What do you think about Mr. Van Antwerp's ideas? How applicable are they to today? Leave a comment and let us know.