The Patriarch
Joseph Kennedy: film, liquor, market operations and the first SEC chairmanship
Summary
Nasaw had access to the Kennedy family papers, including material previously closed, and wrote the definitive biography of Joseph P. Kennedy. It covers the Boston origins, the banking and film industry careers, the stock market operations of the 1920s, the chairmanship of the Securities and Exchange Commission, the ambassadorship to Britain, the campaign against intervention in the war, and the management of his sons' political careers.
The business material is substantial. Kennedy made money in banking, in the Hollywood studios where he restructured and merged film companies including the transactions that produced RKO, in liquor importing after Prohibition ended, and in real estate, notably the Chicago Merchandise Mart. Nasaw examines the stock pool operations Kennedy participated in during the 1920s and is careful about what the evidence supports, concluding that Kennedy engaged in practices that were legal at the time and that he later prohibited as the first chairman of the SEC, which Roosevelt appointed him to precisely because he knew the practices.
The political material is the more contested part. Nasaw documents Kennedy's opposition to war with Germany in detail and argues it came from a conviction that Britain would lose and that war would destroy capitalism and democracy, rather than from sympathy with Nazism, while documenting the antisemitic statements without excusing them.
The book is long and archival. It is useful to investors mainly for the account of how fortunes were assembled in a period of weak regulation and for the SEC chapters on how the first securities regulation was designed by someone who had exploited its absence.
Key takeaways 7
- Kennedy assembled his fortune across banking, film, liquor importing and real estate rather than in one industry, and the common element was buying distressed assets and restructuring them.
- The stock pool operations of the 1920s were legal at the time, and Kennedy's later prohibition of them as SEC chairman rested on his direct knowledge of how they worked.
- Roosevelt appointed Kennedy to the SEC because his experience of manipulation made him capable of writing rules that would actually bind.
- Kennedy's film industry profits came from financial restructuring and consolidation of studios rather than from producing successful pictures.
- His opposition to American entry into the war rested on a judgement that Britain would be defeated and that war would destroy the economic system, and it ended his political career.
- Kennedy directed his sons' political careers with the same methods he used in business, including buying influence and controlling information.
- Regulation of securities markets in the 1930s was designed by practitioners who knew which specific practices needed prohibiting, which is why it was effective.
Who should read it
Investors interested in how fortunes were built under weak regulation and in the design of the first American securities rules by someone who had exploited their absence.
Where it sits in the reference 2
Who recommended it 2 · 2 direct
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