So I was recently listening to some presentations from an audio series about investment. This installment was called “Crashes, Booms, Panics, and Government Regulation.” I found out that it was actually two presentations. One was called “Crashes, Booms, and Busts,” and the other was called “The New Deal and Government Regulation.” Both were more historical than I would have thought, which added to the appeal for someone like me.
Crashes, Booms, and Busts
The presentation “Crashes, Booms, and Busts” gave some brief comments about how the business cycle works. But most of the presentation was actually a history of all of the stock market crashes in the United States through the time it was made. (At the time that I write this, there have been none since then; so it seems pretty up to date.) It starts in the eighteenth century with the Panic of 1792, and goes through the twentieth-century “Black Monday” in 1987. Of course, they also include one of the most important crashes in our history, which was the Crash of 1929 – also known as “Black Tuesday.” In covering American history since that crash, they also note how government policy may have helped to prevent future crashes. I should note that the word “crash” means something different from a “recession,” which is a broad economic crisis lasting a long time. With that in mind, unless you count the 1987 “Black Monday,” there hasn't really been a crash in this country since the Great Depression – recessions and other crises, yes, but not “crashes.” And in my opinion, “Black Monday” seems almost too mild to be counted in this category. But that's just an opinion – others may disagree with me if they so choose.
Crowd gathering on Wall Street after the 1929 crash
The New Deal and Government Regulation
The other presentation was called “The New Deal and Government Regulation.” Basically, it was a history of just one aspect of the New Deal – namely, the regulation of company disclosures to potential investors. This culminated in the famous “Securities Act of 1933,” and “Securities Exchange Act of 1934.” The main philosophy of this act was basically “disclosure,” or the idea that interstate companies must disclose all material information that investors might ever need to make up their mind about an investment decision. Before this act, company finances were typically shrouded in secrecy; and insiders had something of an advantage in knowing when to buy and when to sell. Today, “insider trading” of this kind is illegal; and pertinent information must usually be disclosed in financial statements. Although I am a critic of many “New Deal” programs, I wholeheartedly support this particular legislation; and agree with this presentation about the need for it.
Franklin Delano Roosevelt, architect of the New Deal
Both of these presentations were quite good, and justified the cost of the purchase for someone like me.
If you liked this post, you might also like:
Part of an audiobook series
Secrets of the Great Investors
Crashes, Booms, Panics, and Government Regulation
Others to be covered later
See also the audiobook series
Great Economic Thinkers
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