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Echoes Dispatches From Economic History

Julia Ott

Will Greg Smith Reform Wall Street?: Echoes

over 3 years ago
Source: Library of Congress Prints and Photographs Division

Last week, an executive director at Goldman Sachs Group Inc. named Greg Smith jumped off the op-ed page of the New York Times and into headlines around the globe.

Smith's "wake-up call" intended to alert Goldman's board of directors to the increasingly "toxic and destructive" culture of the firm. By hawking "lucrative and complicated products," Goldman generated billions of dollars for itself, but too often violated the interests of the firm's clients: the banks, mutual funds, insurance companies and pension funds that manage the savings of millions of people.


Regina Lee Blaszczyk

`Mad Men' and the Odd Power of Focus Groups: Echoes

over 3 years ago
Mad Men

When Don Draper wants to get inside the consumer's head, he turns to Faye Miller, a beautiful and brainy market-research consultant.

In a memorable scene from Season 4 of "Mad Men," AMC's hit drama about the advertising industry in the 1960s, Miller gathers the unmarried secretaries at Draper's firm into a room for a friendly chat about Pond's Cold Cream. Draper and a few others watch from behind a mirror.

Echoes: lede

For those who remember anything they learned of economics in high school -- kudos. As for the rest of us who would have much rather spent frivolously what little money we had instead of learning how to make it grow, perhaps the method used to teach us about money was uninspired or even, as Sir Norman Angell would suggest, outmoded.

Angell, a British economist, Nobel laureate and prolific writer, was also the designer of something called "The Money Game" -- a visual method of teaching schoolchildren the fundamentals of finance and banking. First published in 1928 by J. M. Dent & Sons, "The Money Game, How to Play It: A New Instrument of Economic Education" was both a book and a game. Although the bulk of the book is an essay on money and a discussion of economic theory, players can easily skip to a summary of the game's story and an explanation of the rules.


Alasdair Roberts

FDR's `Dictatorship Plan': Echoes

over 3 years ago
FDR Dictatorship Plan

In February 1937, Franklin D. Roosevelt was beginning his fifth year as U.S. president. His first term had been grueling, as the administration improvised a response to the country's unprecedented "national emergency."

He had been assailed by critics for trampling on rights and creating an unmanageable sprawl of new federal agencies. But now, three months after an election that he took as vindication, the president's mood lightened. He told friends that he had earned some political capital, and he was going to spend it.


Philip Scranton

The Match King's Empire Collapses: Echoes

over 3 years ago
Echoes: Ivar Kreugar

When Swedish investor Ivar Kreuger’s billion-dollar international business conglomerate crumbled in early 1932, Time Magazine labeled it "one of the ugliest affairs in business history."

And when Kreuger killed himself on March 12 of that year, what first seemed a tragedy brought on by stress soon led to the discovery of one of the Depression decade’s greatest cases of securities fraud.


Woody Holton

Abigail Adams's Secret Business Ventures: Echoes

over 3 years ago
Paper Dollars

The Founding Fathers lorded it over the Founding Mothers in a million ways, but none annoyed Abigail Adams more than the legal degradation that 18th-century women faced the moment they got married.

A spinster or widow had essentially the same property rights as a man. But once women married, their property was "subject to the controul and disposal of our partners, to whom the Laws have given a soverign Authority," as Adams complained to her husband John in a June 1782 letter.



Weekly Links: Echoes

over 3 years ago

The Big Picture on the Nasdaq's resurgence
Ed Conway of Sky News on the history of 100-year bonds
Fox Business on the economic benefits of daylight saving time
Michael Kazin on the history of "crony capitalism"
Tyler Cowen on postwar development economics and the "big push
Edwin Black on IBM and the Holocaust


Regina Lee Blaszczyk

On the Great Strike of 1912 (Part 3): Echoes

over 3 years ago
Wood Mills

In late March 1912, the Great Strike that had for three months paralyzed the mills of Lawrence, Massachusetts, came to an end.

The strike had begun on Jan. 11, when weavers walked out on the job to protest wage cuts. It soon grew and turned violent, with 25,000 workers joining in the protest.

Echoes: Liberty Bonds

When the Federal Reserve’s Open Market Committee meets this afternoon, any decisions or announcements it makes will draw the attention of traders and commentators around the world.

The purchase and sale of U.S. Treasury securities by the FOMC is the main method today by which the government attempts to manage the economy by influencing the price of credit. But the government didn't always undertake this practice of trading in its own bonds with the goal of manipulating interest rates -- its early bond-buying efforts had a very different goal.


Philip Scranton

The Strange Start of FDR's 1932 Campaign: Echoes

over 3 years ago
Roosevelt and Smith

In 1932, the Democrats' contest for the presidential nomination began on March 8th, with the New Hampshire primary. Given his later nationwide victories, Franklin D. Roosevelt  in retrospect appears as an all-but-inevitable nominee, then president.

But as spring approached in the Great Depression’s fourth year, this was far from certain.

Echoes: The Depression Made Keynesians of Capitalists

Re-elected with 61 percent of the vote in 1936, President Franklin D. Roosevelt told his supporters, "Now I'm going back to do what they call balance the budget." True to his word, he cut spending and promptly sent the nation into a recession -- a sharper decline than in 1929.

The orthodox wisdom in Washington in 1937 remained cutting spending, reducing taxes and balancing the budget to restore business confidence. Punitive taxes on investments and capital gains and "unreasonable restrictions" on finance had put businessmen into "a state of stagnation if not panic," critics of the New Deal argued. Uncertainty was the main reason the economy was in a slump, declared the U.S. Chamber of Commerce. The conservative "Brass Hats" of the National Association of Manufacturers told Roosevelt to end social-welfare policies and get tough with labor if he wanted to reduce unemployment. Chase National Bank President Winthrop Aldrich said it was time to "dismantle the anti-business elements of the New Deal."


Kirsten Salyer

Weekly Links: Echoes

over 3 years ago

Vox on a tale of two depressions
Free Exchange on the Fed’s Reagan recovery
The Telegraph on a newly uncovered transcript of the Bretton Woods conference
History News Network on corporate personhood through the years
The NEP-HIS blog on the history of China's economic boom


Carl Wennerlind

How Alchemists Invented Modern Finance: Echoes

over 3 years ago
Echoes: Alchemists

The amazing capacity of credit to create value -- and to destroy it -- has often been compared to alchemy. After the alchemists failed in their search for the philosopher's stone, the mythical substance that could turn ordinary metals into gold, the power of creating something out of nothing has come to rest solely in the hands of the financiers.

Although George Soros, who titled one of his books "The Alchemy of Finance," may only have used alchemy as a colorful metaphor to point to the wondrous generative capacity of credit, it turns out that there is a much deeper connective bond between alchemy and modern finance, dating back to the 17th century, when the modern financial system was just forming.

Interior of an A&P Store

On Feb. 27, about 14 months after it filed for bankruptcy, the Great Atlantic & Pacific Tea Co. won court approval to resume normal operations as a privately held company. If history is a useful guide, the firm that was the world’s largest retailer for much of the 20th century will have a hard time regaining its retail luster.

A&P, which at its peak owned almost 16,000 grocery stores in the U.S. and Canada, is the latest in a very long line of retailers that have turned to the bankruptcy courts to fix their problems.


Andrew Engel

The Original GM Bailout: Echoes

over 3 years ago
John Raskob

The bailout of the auto industry by the federal government after the 2008 financial crisis is fresh on the minds of many Americans, not least because it's a persistent topic of debate on the Republican campaign trail.

After receiving almost $50 billion in federal assistance, General Motors Co. has once again, by the estimation of some industry analysts, regained its position as the No. 1 automaker. Depending on whom you talk to, this was either a great success of limited government intervention or an intolerable market intrusion that will ultimately lead to ruin.

Sirovich and La Guardia, 1928

Assailing those responsible for the continuing Great Depression was a very serious business in the early 1930s. Wall Street financiers, commodity speculators, bankers foreclosing on homes, employers cutting wages and jobs -- all weathered fierce public criticism and bitter jokes at their expense.

In March 1932, Representative William Sirovich, a Democrat of New York, identified new miscreants: drama critics. The New York Times reported that Sirovich, chairman of the Patents, Trademarks and Copyrights Committee, charged that the theater business was on the rocks due to “malicious criticism” by critics posing as “know-it-alls.”

Echoes, March 2

After the 2008 financial collapse, a few congressional panels, executive-branch agencies and journalists tried to find out what really happened at the predatory banks and lenders that created so much havoc.

But the whole truth has so far failed to emerge. And now, with Wall Street lobbyists and lawyers fighting the Dodd-Frank financial overhaul at every step, and the new responsibilities for government regulators seeming ever more daunting, it looks as though true financial transparency is as far away as ever.


Rosalyn Terborg-Penn

The First Black Millionaire: Echoes

over 3 years ago
Uploaded by 6697267 at GMT:2012-03-01T15:55:37

Imagine a black-woman millionaire 100 years ago -- one whose wealth came from her own manufacturing company. Madam C.J. Walker invented hair-care products and cosmetics that she manufactured for black women and distributed herself, in the process providing jobs for thousands and almost single-handedly expanding the black middle class of Indianapolis.

As we wrap up Black History Month, it's worth remembering her story.


Regina Lee Blaszczyk

On the Great Strike of 1912 (Part 2): Echoes

over 3 years ago
Children of Lawrence

In Lawrence, Massachusetts, everyday life changed on Jan. 11, 1912, when Polish weavers marched out of the Everett Mill in protest of wage cuts. That evening, throngs of workers met at a local hall and voted to back the weavers. The next day, 2,200 workers from the mill went on strike.

When workers at the American Woolen Company’s gargantuan Wood Mill opened their pay envelopes and saw their money was short, they joined the Everett workers in solidarity. By mid-January, the city’s monster textile mills were at a standstill as 25,000 factory workers were refusing to do their jobs.


About Echoes

Echoes is Bloomberg View's economic history blog. It is edited by Stephen Mihm, an associate professor of history at the University of Georgia and the author, with Nouriel Roubini, of "Crisis Economics: A Crash Course in the Future of Finance," and of "A Nation of Counterfeiters: Capitalists, Con Men and the Making of the United States."

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