How It Was: Fatuosity and the Great Depression

Fatuosity, an archaic term for idiocy, is such a marvelous word it needs rejuvenation in our modern era of buffoon economists, smirking corporate charlatans, and giggling business journalists. While the globe is spinning down from recession to depression to doom, our ears are ringing with daily announcements of turnarounds by people who find it difficult to match their socks in the morning. We had it all before in the early 1930s, but hardly anyone who was alive then is alive today to remember it.

When the Great Crash occurred, Harvard University had its Harvard Economics Society, a collection of Harvard pundits who published a weekly sheet to make their wisdom available to the locals in Harvard Yard, to Wall Street, and to the world at large.

Wisdom, indeed. The Great Crash began in October, 1929, and lasted more than 10 years until the intensive government-sponsored production of World War II pulled us out of it. Here are some comments from the Weekly Letter of the Harvard Economics Society in the weeks and months that followed the beginning of the misery of hard times.

"A severe depression like that of 1920-1921 is outside the range of possibility." -- November 16, 1929.

"With the underlying conditions sound, we believe that the recession in general business will be checked shortly and that improvement will set in during the spring months." -- January 18, 1930.

"General prices are now at bottom and will shortly improve." -- May 17, 1930.

"Since our monetary and credit structure is not only sound but unusually strong ... there is every prospect that the recovery which we have been expecting will not be long delayed." -- August 30, 1930.

"Recovery will soon be evident." -- September 20, 1930.

"The outlook is for the end of the decline in business during the early part of 1931, and steady ... revival for the remainder of the year." -- November 15, 1930.

Of course, they were not alone. The President of the United States, Herbert Hoover, continually touted for his brain power as a former engineer, was himself delusional. Hoover's words: "While the crash only took place six months ago, I am convinced we have now passed through the worst and with continued unity of effort we shall rapidly recover." And in June 1930 he beamed at a delegation requesting a public works program to help speed the recovery: "Gentlemen, you have come sixty days too late. The depression is over."

As for the corporate charlatans, they came out of the woodwork large and small to pontificate:

"These really are good times, but only a few know it." -- Henry Ford, President of the Ford Motor Company, in a statement in 1931.

"I don't know anything about any depression." -- J. P. Morgan, banker and financier, in a statement in 1931.

The central problem is that the people who claim to know enough to guide the public are too often either witless or self-aggrandizing con artists. Economics is far from a science, and economic theory is too often based on ridiculous assumptions about human behavior. Corporate chiefs are far from super-intelligent, and they are too often in place because of sociopathic values. As for business journalists, some are and some aren't. The consequence for the rest of us is incipient chaos and the prospect of doom. The more we hear financial wizards use technical jargon to obfuscate their sentences, the more we can be certain that they're bluffing.

Maybe it's a great joke. What is most likely is that when this crisis is finished, maybe in 2019, the wheels of the next crash will already be turning. As someone who actually lived through all of the Great Depression, I feel like it's an endless bouffe. The problem, of course, is that we already have people living in tents for lack of a home. That's not a bouffe, it's the beginning of our misery.