Sunday, December 29, 2013

Bernard Baruch, Garet Garrett and Herbert Hoover

Bernard Baruch was a well known Wall Street financier and presidential advisor for much of the 20th century. I wrote previously here of Bernard Baruch's discussion of Garet Garrett in Baruch's autobiography, Baruch, The Public Years. That discussion frequently included Baruch's interaction with major historic figures. The following passage appears on page 233 of Baruch's book and takes place (probably in 1931) in the aftermath of the 1929 Wall Street collapse:

Shortly after the collapse, Garet Garrett called to say that he wanted to see me urgently. I told him I was taking the train to Albany to see Governor Roosevelt and that he could ride along with me. He came as far as Poughkeepsie, and on the way talked at length about the economic situation. We were old friends, and could talk freely, but I could see that Garet was holding something back.

As the conversation went on, I kept looking at him questioningly. Finally he flushed and said, "All right, I'll tell you the truth. Hoover asked me to get your thoughts." I told him I'd be glad to give the President any help I could; he had only to ask.
p. 233

Baruch was a financial contributor to Woodrow Wilson and, as the passage indicates, an advisor to other presidents of both parties. He praised the passage of the Federal Reserve Act of 1913. (p. 10). While he criticized particular policies of the Federal Reserve Board in the years leading up to the crash, such criticism was limited to particular interest rates and did not challenge the underlying assumptions that allow a central bank to manipulate the national currency. (p. 221). Baruch's criticism on page 221 is useful if placed in the context of a broader analysis of Federal Reserve policy throughout the 1920's and a thorough explanation of business cycle theory. Such analysis is found in Murray Rothbard's America's Great Depression.

Baruch's book seems to be written through the prism of the accepted establishment explanations as to the causes and political implications of the stock market collapse. Individual facts contained therein are useful once the right context is known.

Garrett's affiliation with an obvious "insider" might place him in a bad light, but I will let Garrett's own writings serve as his defense against any suspicion of being sympathetic to the establishment agenda.

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