Gloating Doom as a Media Bias

The great stock market bust of 1929 is approaching its century anniversary. Financial writer Andrew Ross Sorkin got ahead of that by recently publishing a nicely-selling history. I may read that, but for now, I opted to read John Kenneth Galbraith’s more classic The Great Crash of 1929. Written in 1955, this earlier book has a more contemporaneous perspective.

One passage that stuck out to me was how Galbraith concluded a section showing how the New York Times ducked the trend of optimism, reporting instead that each market rally was merely delaying an inevitable mass sell-off. That trough came. A victory lap followed:

However, by far the greatest force for sobriety was the New York Times. Under the guidance of the veteran Alexander Dana Noyes, its financial page was all but immune to the blandishments of the New Era. A regular reader could not doubt that a day of reckoning was expected. Also, on several occasions it reported, much too prematurely, that the day of reckoning had arrived.

Indeed the temporary breaks in the market which preceded the crash were a serious trial for those who had declined fantasy. Early in 1928, in June, in December, and in February and March of 1929 it seemed that the end had come. On various of these occasions the Times happily reported the return to reality. And then the market took flight again. Only a durable sense of doom could survive such discouragement. The time was coming when the optimists would reap a rich harvest of discredit. But it has long since been forgotten that for many months those who resisted reassurance were similarly, if less permanently, discredited. To say that the Times, when the real crash came, reported the event with jubilation would be an exaggeration. Nevertheless, it covered it with an unmistakable absence of sorrow.

I can’t say the Times has remained so sober, but since a Republican is in office, its reporting reads like a market skeptic. The high-flying price of equities today resembles 1999 to me more than 1929, which is not a comfort, but if corporate earnings don’t match the growth of today’s AI optimism, the Times will again have grounds to gloat.

Eric Shierman lives in Salem and is the author of We were winning when I was there.