The Great Depression

The Great Depression - America compared#16 Corporatism...

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America compared #16 Corporatism – state that works together, very intrusive Different o Americans didn’t use deficit spending until after war o Germans wanted to use war to get out of the depression o Corporatism is softer in US than in Germany and more mixed results in US b/c govt cant control it as much as Nazis can control of it better The Great Depression US has had depressions before Economy in 19 th century = “volatile” Called “panics” in 19 th century not depression 1893 made lives of farmers super depressing Depression of 1930s “Great Depression” o International depression o No easy fix for it (made it hard for Americans) o Conventional economic theory and economic thinking didn’t apply here b/c of the enormity of the GD o Trying to date GD = difficult (not Stock Market Crash) o Depression was long before the SMC (farmer would say ~1922) o Farmers started complaining about falling of commodity prices and seeking help/relief from national government (relief didn’t come) o 20s experienced “under consumption” (consumers but not consuming enough)
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o Likely b/c of wage earners did not have salaries keep up with inflation (buying power was reduced every year rather than enhanced ever year) o Businesses had alarming levels of inventory (signals weakness of economy) o Began in a period of very little governmental regulation In securities business (buying/selling stocks/bonds) very little regulation “buying on the margin” – borrowing money with which to buy stocks/bonds No one made brokerage houses limit the margins Great Bull Market = increase in stock prices October 1929 – Black Thursday – Stock Market Crash Not just individual bankruptcies, even institutional bankruptcies (brokerage houses and even banks) o Institutional Bankruptcy o Prices dropping b/c jobs are lost o Unemployment rate – in 1930 in low teens ~13% year later high teens 32
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The Great Depression - America compared#16 Corporatism...

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