Unregulated Capitalism During The Great Depression

Imagine this. You wake up one morning in the year 1929, in your luxurious, pricey mansion. You then make your way downstairs to eat that nice big breakfast. Then you kiss your family good bye and head off to your fancy job. You come home that evening and suddenly you’re flat broke. Meaning all your money and life’s savings vanished. Unreal right? Well it was real for hundreds of families on October 29, 1929. The day the stock market crashed and when America’s confidence was challenged greatly.

The collapse of the stock market in 1929 marked the downfall of America along with the constant dustbowls. Document 3 shows a chart of the stock market crash of 1929 and how it increased the rate of unemployment in the United States. It

The stock market crash of 1929 sent the nation spiraling into a state of economic paralysis that became known as the Great Depression. As industries shrank and businesses collapsed or cut back, up to 25% of Americans were left unemployed. At the same time, the financial crisis destroyed the life savings of countless Americans (Modern American Poetry). Food, housing and other consumable goods were in short supply for most people (Zinn 282). This widespread state of poverty had serious social repercussions for the country.

Imagine losing years of saved money, while being homeless and jobless. Americans went through these sufferings after the Stock Market crash. After the Stock Market crash of 1929, the United State’s economy crashed and worsen as more economical problems built up. During this time, the political, economic, and social organization were in a state of confusion and disruption. The government, various groups, and individuals sought ways to fix the problems of the Great Depression. Americans faced many problems during the Great Depression, he government, various groups, and individuals attempted to solve the problems brought about by the Great Depression.

In conclusion, the Great Depression was a downside of America’s history. But, in the dark times, one of our nation’s best presidents came into light. Franklin D. Roosevelt once said “the only thing we have to fear is fear itself”. This meant in those times that Americans were doing more harm than good. When they withdrew their stocks and money from the banks, they were causing more damage to the economy. With shutting down the banks and getting congress together, they were able to solve the dilemmas of the Great Depression through actions taken by federal and state

The Great Depression was a difficult time for all the American people. It was a time of unemployment, falling wages, and hope for recovery (“Chapter 27”). Some of the causes of the Great Depression were government policies, economic factors, and the gold standard (“Chapter 27”). Other reasons included the fall of the stock market, overseas investments, and the investments in Florida real estate (Farless). The president at the time of this difficult time was President Herbert Hoover. When the Great Depression started, Herbert Hoover took matters into his own hands. President Herbert Hoover came up with multiple recovery attempts.

     By 1933 millions of Americans were out of work. Bread lines were a common sight in most cities. Hundreds of thousands of people scoured the country in search of food, work, or a roof. There was a popular song from this era known as “Brother, can you spare a dime (Modern)?” A big step that happened for the unemployed were the Civilian Conservation Corps, a government program that brought relief to men between the ages of 18 and 25. The Conservation Corps gave jobs to young men in work camps across the country for about $30 per month. There were about 2 million men that took advantage of these jobs (The Great Depression). These men took part in a variety a jobs that included: planting trees, elimination stream pollution, creating game and bird sanctuaries, and conserving natural gases. For the other part of society work relief came in the form of the Civil Works Administration. These jobs consisted of ditch digging to highway repairs to teaching. Civil Works Administration was created in November 1933 and was ceased in the spring of 1934. Roosevelt continued to offer unemployment programs that offered pay (America).

The 1920s seemed to promise a future of a new and wonderful way of life for America and its citizens . Modern science, evolving cultural norms, industrialization, and even jazz music heralded exciting opportunities and a future that only pointed up toward a better life. However, cracks in the facade started to show, and beginning with the stock market crash of 1929 the wealth of the country, and with it the hopes and expectations of its people, began to slip away. The Great Depression left a quarter of the population unemployed and much of the rest destitute and uncertain of what the future held. Wealth vanished, people took their money out of banks, and plans were put on hold. The most significant way in which the Great Depression affected Americans’ everyday lives was through poverty because it tore relationships apart and damaged the spirit of society while unexpectedly bringing families together in unity.

To put it another way, 12,830,00 were unemployed in 1933 (Carter, Jimmy). On the contrary, if those who worked, they had extremely small wages. Nonetheless, millions of people were migrating across the nation to seek for food or jobs. Especially in 1930-36, More than a million acres of farmland were rendered useless in the Southwest and Midwest, of course hundreds of thousands of farmers joined the ranks of unemployed ( “Causes of the Great Depression” 2016.) . Oakies, migrant agricultural workers from Oklahoma, were migrating the west, few found jobs. Since there were no jobs available, families often couldn’t afford for food. For example, Boyer and Stuckey (2003) wrote, “ Poverty-stricken men and women waited in bread lines for bowls of soup and pieces of bread given out by charitable organizations (p. 450).” People leaving homes due to payments of rents moved to Shantytowns, makeshift shelters. This also made families fall apart. Shantytowns were also called Hoovervilles, because they were blaming an unresponsive president for their plight. To end that, percentage of unemployment remained

From 1929 to 1945, two catastrophes occurred: the Great Depression and World War II. American political leaders established a cause-effect relationship between economic collapse and total war, based on these two events, which defined their policy approach in the post-war period. In the 1930s, American leadership, and most importantly, President Franklin Delano Roosevelt, came to view economic decline, political radicalization, and instability as forming a vicious cycle that led to utter chaos and war. Although FDR did not know the future consequences of the economic fallout, he did know that breaking the cycle was of systemic importance. FDR’s policy platform, known as the New Deal, disregarded the historical wariness for government intervention and boldly connected economic security to freedom. Essentially, he attempted to push the American system to its limit in order to save it. Even with conservative elements constantly attempting to restrain his initiatives, FDR expanded his focus in the latter years of the 1930s to include international affairs as war broke out in Europe, Africa, and Asia. FDR and other government elites openly talked about the responsibility America had to build a new world order.

When demand leveled off, factory owners had to cut back production and their workforce. Layoff began in some industries like automobile industry as early as 1928, making ordinary citizens unemployed. As unemployment increased quickly and vastly, a great depression seemed imminent.

Many people speculate that the stock market crash of 1929 was the main cause of The Great Depression. In fact, The Great Depression was caused by a series of factors, and the effects of the depression were felt for many years after the stock market crash of 1929. By looking at the stock market crash of 1929, bank failures, reduction of purchasing, American economic policy with Europe, and drought conditions, it becomes apparent that The Great Depression was caused by more than just the stock market crash. The effects were detrimental beyond the financial crisis experienced during this time period.

The world had faced two main economic problems. The first one was the Great Depression in the early of 20th Century. The second was the recent international financial crisis in 2008. The United States and Europe suffered severely for a long time from the great depression. The great depression was a great step and changed completely the economic policy making and the economic thoughts. It was not only an economic situation bit it was also miserable making, made people more attention and aggressive until they might lose their lives. All the society was frightened from losing money, work and stable. In America the housing market was the main factor of the great depression. A crisis of liquidity appeared in the banks forming a credit crunch. This period was influenced by over extended stock market shortage of water in the south and over trusting. The American government put down some regulations to control the productions which were essential for the war.

For example, when a good is scarce, the prices goes up, so consumers try to avoid buying and therefore conserving the resource. Then, the suppliers want to find more of the source as to get a better profit. The reasons behind their actions are selfish, yet they benefit all of society. Smith identified that the pursuit of profit and the power of self-interest would increase motivation and result in more advances in technology. His model of capitalism was on the basis of freedom and selfishness as a motivator for society. It was also on the basis that the economy would go through recessions and expansions but fix itself. Recessions are periods in the economy in which unemployment goes up, while profits and spending goes down; a slowdown of the economy. An expansion is essentially the exact opposite. The classical model of economics states that the economy will continue to go through these fluctuations over time and will fix itself with no help, thus not needing a government to give influence.

The Great Depression brought about high unemployment due to the stock market crash of 1929. The average U.S. unemployment rate in 1931 at the start of the Great Depression was 15% and at the end of the Great Depression in 1939; the rate was 17%. Powell (2003) wrote, “The most troubling issue has been the persistence of high unemployment throughout the New Deal period. From 1934 to 1940, the median annual unemployment rate was 17.2 percent.” (p. 129)