“Gentlemen prefer bonds”, according to a quip attributed to Andrew Mellon, but which was almost certainly taken from Anita Loos’s 1925 novel Gentlemen Prefer Blondes. Mr Mellon was an industrialist, financier and philanthropist who served as US Treasury secretary under three presidents until his tenure ended ignominiously at the height of the Great Depression.
Mr Mellon’s mistake was trying to keep the federal budget balanced as tax revenues dwindled. His boss, then president Herbert Hoover, said Mr Mellon’s strategy was to maintain strict discipline over the economy, to “liquidate labour, liquidate stocks, liquidate farmers, liquidate real estate … it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life.” He also advocated letting banks fail.
Needless to say, Mr Mellon’s austerity measures made matters worse, helping to turn the crash of 1929 into the Great Depression. Nobody much liked him after that.
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