March 29, 2010

The Irregular Blather Mar. 29, 1931

No Journal was published Sunday, Mar. 29, 1931. A brief blather on something I noticed this week.

One part of following day by day 1930's news items that I find interesting is seeing that extra dimension about the period that I wasn't aware of. This week's example is the farm situation. The popular image of this is of poverty, drought, and a depression that struck earlier than for the rest of the country - and this is accurate as far as it goes. But what I didn't realize is that this happened in spite of multifarious fairly large farm relief programs and an apparently unstoppable farm lobby. Some news items in this category come up regularly, including the ups and downs of the expensive Farm Board price-support program, and the various drought relief measures that occupied the “just-adjourned” (in 1931) Congress. But, there are also those not-so-little extras that keep popping up - the Federal and joint-stock land banks, organized to provide agricultural credit; the Hoch-Smith resolution, enacted to lower transport rates for farmers (at the expense of the railroads); and, last but not least, the acknowledgement by the Journal's editorial writers that farm interests would probably have the muscle to pass whatever additional relief measures they wanted when the next Congress convened.

There are a few candidates for parallels in recent times; the strongest is of course the banks. While not blessed with the same salt-of-the-earth qualities as farmers, bankers have nevertheless apparently convinced those in charge that the ability to run a leveraged-out-the-wazoo hedge fund with public backing (plus a quadrillion or two of derivatives on the side) is as necessary to the continuation of our modern economy as the production of sufficient wheat for food was in 1931. As a result, banks got to write their legislative ticket for a number of years, and received the benefit of multiple bailout programs, counted and uncounted, when they ran into trouble. (For example, in the uncounted category, I think the cost of the current programs to support home prices, including the Fed's campaign to lower mortgage rates and the effective socialization of the home loan market, should properly be charged to the bank bailouts, since their chief reason for existence is the fear that a renewed decline in home prices would put banks in jeopardy again).

The result so far has been similar in each case; a massive and unprofitable overproduction of the commodity in question (wheat then, credit now). Let's hope the sequel is different.

Finally, some video of the week:

I couldn't find Man of the World, mentioned Mar. 25: Starring William Powell, a "great boon to the talkies," because he isn't suited to playing stereotypical hero roles; his portrayals are non-sentimental and realistic, with genuine human frailties. Latest Powell character is the suave blackmailer who earns his living "by his wits." While story has the customary love interest, played by Carole Lombard, writer Herman Mankiewicz is to be praised for "sacrificing the more comforting happy ending for the sake of credulity and common sense." However, here's a pretty good quality clip of My Man Godfrey, featuring the same pair a few years later:

Play "My Man Godfrey" on Youtube

Here's a smooth swingin' Vincent Lopez and his orchestra, mentioned Mar. 26: Appearing at the Palace - Debut of Dorothy Stone, singing and dancing star, is fresh and charming. Return of Vincent Lopez and his St. Regis orchestra; their new number is a modernistic jazz composition entitled Steel, "which tells a musical story of the importance of this metal in modern life." Burns & Allen contribute hilarity to the bill, along with "musical comedy baritone" J. Harold Murray. This is one of the ones that makes me want to travel back in time ...

Play "St. Louis Blues with Vincent Lopez" on Youtube

And a nifty little dance number featuring the above-mentioned Dorothy Stone, some could-be-worse Cole Porter music, and a young Bob Hope (!):

Play "You Got That Thing" on Youtube


  1. The agricultural sector in the 1920s witnessed a marked decline in its share of national income.

    Banking and finance, and, by extension, corporate profits generally, have been increasing their share of the national income -- as they were, in the 1920s as well.

  2. Bruce - good point, and an important difference. Although I could argue, as Taleb does, that banking profits are largely fake (i.e. that banks always declare nice profits for a number of years, then lose it all and then some when the crisis comes). But there definitely is a difference in standard of living of the average banker vs. farmer :)

    Anyway, the surprise to me, as I said, isn't the fact that farmers were suffering economically (which I was aware of), but that this came in spite of a strong lobby that was able to enact a bunch of relief and protection measures.