1930s The Great Depression

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1930s The Great Depression
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• Our experiment in human welfare has yielded a
  degree of well-being unparalleled in the world.
  It has come nearer to the abolition of poverty
  than has ever been realized before.
• - Herbert Hoover, 1928

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Outcomes Unit 9 The Great Depression

• 1. Why did the Great Depression happen?
  (What caused it?)
• 2a. How did it affect people? (short-term
  effects)
• 2b. How does it affect us today? (long-term
  effects)
• 3. What did the government do about it?
  (How did the federal government expand its role
  in the economy?)

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Over-Optimism in the 1920s
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Causes
Over-optimism of the 1920s
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Over-optimism of the 1920s
Speculation in stock market
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Over-optimism of the 1920s
Dow Jones Industrial Average, 1920-1936 The Stock
Market Crash of 1929
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Over-optimism of the 1920s
Bank failures
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Over-optimism of the 1920s

• Overproduction What happens if theres too much
  supply?

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Over-optimism of the 1920s

• Stock speculation- stock market inflated
• Banks gambling peoples savings on stocks
• Banks loan to people to invest
• Stock market crash causes thousand of banks to
  close
• Businesses and Agriculture overproducing, cant
  sell their goods

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Causes
Over-optimism
GovernmentAction and Non-action


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Government Action and Non-action

• Action Tax cuts to affluent (wealthy), taxes
  hikes to middle and working class
• Non-action Laissez Faire policies. In 1920s,
  government does not regulate businesses, banks,
  stock market
• Non-action no safety net

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These factors cause poverty and unemployment
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(No Transcript)
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Unemployment and Breadlines
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Causes
Over-optimism
GovernmentAction and Non-action

Decline of the Farming Industry
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A Dust bowl storm on the American Great Plains
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Decline of Farming Industry

• Overproduction low prices or cant sell food
• Farmers in debt bought machinery on credit.
  Cant pay installments
• Banks foreclose on farms take over their
  property
• Drought and Dust Bowl leads to more poverty

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Causes
Over-optimism
GovernmentAction and Non-action
Gap between Rich and Poor
Decline of the Farming Industry
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Gap between rich and poor

• 1920-1929 average worker pay increases 9, but
  rich Americans pay increases 75
• In 1929, Richest 1 of American population owns
  about 60 of the wealth
• By 1929, 60 of Americans living below poverty
  line (2000/year), buying goods on credit

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Act it out!