Quote of the Day: John Kenneth Galbraith

So apropos to the present circumstances:

"There can be few fields of human endeavor in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present."

John Kenneth Galbraith

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  1. SPECTRE of Deflation commented on Feb 21

    Those that forget as the saying goes. If our Grandparents were alive I have a feeling they would be shaking their heads right before they smacked the back of your head for being so damn stupid.

  2. SPECTRE of Deflation commented on Feb 21

    Barry, just reread my post and it sucked. My point was that it’s a generational thing. They couldn’t begin to understand how we got ourselves into this mess after they repeatedly warned us of these dangers as we grew up.

    “Never put your eggs in one basket”

    “Always keep some cash just in case”

    “porkchops a nickel a pound, and no one could buy them’.

    I remember those stories and pray we don’t relive them, but I’m afraid we might. We have forgotten.

  3. cinefoz commented on Feb 21

    Imagine Homer Simpson thinner by a little, dressed better, with a better vocabulary, and better trained in the social arts. To me, this is what I see representing a lot of Wall Street and Big Finance. Would you give this man a few billion dollars to watch over?

    Alan Greenspan makes more sense if you imagine him being played by Homer.

  4. LFC commented on Feb 21

    It certainly seems that over the course of my life, I’ve heard “the same old rules no longer apply” … often uttered right before they did apply.

  5. Mr. Obvious commented on Feb 21

    “Its different this time…”

  6. Eric commented on Feb 21

    Speaking of apropos historic statements, below is a part of FDR’s “only thing you have to fear is fear itself” speech. One doesn’t often hear other parts of the speech recollected:

    “And yet our distress comes from no failure of substance; we are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we still have much to be thankful for: nature still offers her bounty, and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply.

    “Primarily, this is because the rulers of the exchange of mankinds’ goods have failed through their own stubborness and their own incompetence, have admitted their failure and have abdicated; practices of the unscrupulous moneychangers stand indicted in the court of public opinion, rejected by the hearts and minds of men. True, they have tried, but their efforts have been cast in the pattern of an outworn provision: faced by failure of credit, they have proposed only the lending of more money; stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading carefully for restored confidence; they only know the rules of a generation of self-seekers; they have no vision, and when there is no vision the people perish.

    “Yes, the moneychangers have fled from their high seats in the temple of our civilization; we may now restore that temple to the ancient truths. The measure of that restoration lies in the extent to which we apply social values more noble than mere monetary profits; happiness lies not in the mere possession of money, it lies in the joy of achievements, in the thrill of creative efforts; the joy of the moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits.

    “These dark days, my friends, will be worth all they muster if they teach us that our true destiny is not to be ministered unto, but to minister to ourselves, to our fellow men; recognition of that falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political positions are to be valued only by the standards of pride of place and personal profits; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdong.

    “Small wonder that confidence languishes; for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, and on unselfish performance. Without them, it cannot live. We must act, we must act quickly. And finally, in our progress towards a resumption of work, we require two safeguards against a return of the evils of the old order: there must be a strict supervision of all banking and all credits and investment; there must be an end to speculation with other peoples’ money; and there must be provision for an adequate but sound currency. These my friends are the lines of attack…”

    What came of these strong words? Among other things, the Glass-Steagall Act of 1933… repealed in 1999.

  7. Short Man commented on Feb 21

    What Eric said.

    You let the inmates run the asylum long enough and it is inevitable what outcome you get. History has shown over and over that Wall Street left to its own devices serves only itself and even then, only the privileged old boys club get the bacon while the others scavenge for scraps.

    What’s worse is when you come to believe that only by keeping the Wall street castles from crumbing under the weight of it’s mistakes will the economy get back on track.

  8. Marcello commented on Feb 21

    Funny. When times are good, JKG gets a ton of grief (not a ‘real’ economist’, ‘statist’, etc etc ad nauseum) [BTW, Barry, not talking about you] but in times like these, you start seeing reams of JKG quotes being used to shed light on the situation, and they are usually spot on. here’s another:

    “The only function of economic forecasting is to make astrology look respectable.”

    that iTulip.com figures prominently.

    Maybe if they listened to him a little more closely in the first place …

  9. Stuart commented on Feb 21

    It’s all just a game.

    I cancelled two subscriptions today.

    The NY Times. The sudden release of their story on McCain.. an overt attempt at meddling into politics to subvert his campaign. I don’t agree with much McCain says but disagree even more with such a blatant attempt at influencing the debate by some gimp who has a bone to pick with him or is a shill for more right wing conservatives.

    Forbes Magazine for their blatant slanderous attack on Peter Schiff. Unbelievably inaccurate in its details, it was more fitting for MAD magazine than a supposedly objective business media. Hack journalism best describes what was done and it was clear it was deliberately marched out in order to discredit Schiff irrespective of fact. I don’t read Forbes for that. Good riddance Forbes and good riddance NYT. It was a mistake to assume and to use readership as ambivalent patsies for political hack jobs.

    Wonder what Galbraith would say about those two news rags.

  10. Mr. Obvious commented on Feb 21

    Ummm, I’m not a NYT appologist by any means, but “sudden release”? They’ve been sitting on the story for a couple of months, and McCain has been aware of them sitting on the story for a couple of months.

    And, ummm, have you noticed that the Times tends to “meddle” in politics. Ain’t like this is the first time…

    Besides, they recently endorsed McCain…LOL.

  11. Ross commented on Feb 21

    Hate to speak ill of the dead, but FDR was a fraud. Did he make that speech before or after he confiscated the peoples gold. Before or after a tax official had to accompany you to open your safe deposit box.

    The Hyde Park Rose Gardens. I prefer the Oyster Bay boy.

    And who did he appoint to clean up the mess? A bootlegger named Kennedy.

    I’ll get off my high horse now. Don’t want to go on about JKG.

  12. cinefoz commented on Feb 21


    I’m not familiar with Peter Schiff so I can’t offer an opinion on that subject.

    Regarding John McCain … I know this isn’t a political site … but the solution to this mystery has more to do with the economics of job retention than politics.

    Various media oriented hard core right wing nuts are in fear of losing their jobs. If Obama wins, he is a new voice who can dance circles around their insane dogma without losing the beat for a second. He won’t even notice them and they will become irrelevant.

    If McCain wins, the same result will happen for only slightly different reasons. The media oriented hard core right wing nuts will appear unpatriotic for not supporting the country.

    If Clinton wins, they can continue spouting hatred that, surprisingly, even some of my relatives don’t recognize as hatred. Thus, they keep their jobs.

    It’s all about the dollars. Some really evil people want the country to remain polarized just so they can earn a few bucks. If that isn’t a definition of evil, I don’t know what is.

  13. DoctorOfLove commented on Feb 21

    Fractional reserve banking is built on optimism (what could be more optimistic than handing your money to someone who you know is going to hand 95% of it to others unknown to you in the hopes that everyone involved will be honest and pay everyone else back?).

    Every 8 or so years, the optimism vanishes.

    We had bank panics every 8 or so years throughout the 19th century when we had a gold standard, and we’ve had them every 8 or so years with fiat money.

    The only thing we’ve learned is that as the money supply is destroyed by the panic part of the bank panic, you can safely print money during the panic to ameliorate its effects. We hadn’t learned that one in 1932 and it cost us. It’s the only lesson we’ve remembered.

    After each one, we think we’ve learned other things, but we never seem to remember them.

  14. Pat G. commented on Feb 21

    “What’s worse is when you come to believe that only by keeping the Wall street castles from crumbing under the weight of it’s mistakes will the economy get back on track.”

    Repeatedly our government has shown that regardless of the kind of mess Wall Street creates, they’ll fix it. Our government is an enabler. I’m for telling them to raise capital by selling their CDOs even if its for .25 on the dollar. They created this mess so let them take the hit then we can all move on.

  15. Winston Munn commented on Feb 21

    Boy, it’s a good thing this economy doesn’t depend on constant debt expansion or we really would be in trouble.

  16. drey commented on Feb 21

    Say what you will about the ideological orientation of the Times – the fact that they sat on the McCain story for months suggests that they went out of their way to NOT impact the nomination process. If there’s nothing there, it’ll blow over in a week or two. If, however, there was some sort of quid pro quo for a lobbyist then it will come out well before the general election as it should…

    “The Affluent Society” is one of the best books I’ve ever read – timeless stuff about how the economy depends on mindless consumption.

  17. SPECTRE of Deflation commented on Feb 21

    Boy, it’s a good thing this economy doesn’t depend on constant debt expansion or we really would be in trouble.

    Posted by: Winston Munn | Feb 21, 2008 7:08:58 PM

    BINGO! For this to work, you must originate more credit/debt than is being vaporized with each announcement. The system either grows or dies at this point. We have never faced anything close to this under a Fiat system, and for those Empires who have, each has failed.

  18. wunsacon commented on Feb 21

    cinefoz, thanks for the good posts. Glad you haven’t been put off by the jabs the past month or so.

  19. wunsacon commented on Feb 21

    Eric, wow. Deja vu.

  20. VennData commented on Feb 21

    In “Tenured Professor” (written by JKG) a pedestrian econ. prof. figures out a way to make oodles of money betting against people’s greed (the character calls it dementia.)

    One of the things he does with his vast wealth is fund academic ‘peace’ chairs at military academies.

    Nice quote btw…

  21. Tom C commented on Feb 23

    The economy doesn’t depend on constant debt expansion, the government does. JKG’s comment is silly. History counts for even less in the world of politics.

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