The Great Depression of 1929 - Case Study Example

Great Depression and its adverse impact on Americans of client> taken> of client> Great Depression and its adverse impact on the Americans Great Depression had a vast influence on the economy, politics, standard of living and psychology of Americans. Beginning of Great Depression The Great Depression began in October 1929, when the stock market crashed, causing banks to go bankrupt. It was not just a recession; the nation had to go a serious setback for a couple of years. Recovery seemed to be pretty distant. It was the longest depression ever seen by western world. The trauma did not only affected Americans economically, but also had impact on their politics, standard of living and psychology of the nation (M. Lawson and A. Lawson). Economic Impact Great Depression brought a major economic slump in America. With the stock market crash, saving of many rich people were drowned with the downfall in stock market and also in real estate. Leaders were still optimistic with the stock market situation, and kept on giving predictions. Unfortunately, the Depression deepened (Nelson). The most distressing impact of the Great Depression was the human suffering. During the period of agony, world output and standards of living decreased to a great level. One-fourth of the labor could not find jobs in early 1930s. Situations began to heal in mid 1930s, but were not recovered totally (Pells and Romer). By 1932, manufacturing output had decreased 54 percent from 1929’s output; automobile industry was declined by 80 percent; housing was also declining by 90 percent (H. Young and K. Young). By 1933, out of 25,000 banks in US, 11,000 had gone bankrupt. Confidence was lost in the public because of failure of so many banks. Spending was reduced to a great level, and so affected the demand. Investment was nowhere to be seen, due to which no there were no chances of prosperity. 25-30 percent of the workforce were unemployed which is about 12-15 million workers (Nelson). US instituted unemployment insurance programs, which were designed to compensate for those unemployed workers who could not find work. This program assisted them for a short term. Also, an old age pension system was launched through Social Security System in 1935 (Pells and Romer). Impact on Standard of living Great Depression, in which stock market crashed, banks went bankrupt, and how could it not affect the standard of living of people. During the depression, the total national income decreased from $90 million to $40 million; from 1929 to 1933 consumption levels declined 18 percent and investment levels decreased sharply by 98 percent (M. Lawson and A. Lawson). The standard of living began downsizing in 1920s before the stock market collapse. 60 percent of Americans lived below the poverty line and 1 percent had 20 percent of nation’s wealth. The main cause of Great Depression was the overproduction in agriculture due to which demand for products decreased which affected the economy. Due to the crisis in American agriculture, small scale farmers were greatly affected(M. Lawson and A. Lawson). Farmers received less compensation for their cultivated crops. Many people ran out of basic necessities such as shelter, medication and clothing. Food was also given by parents in a limited amount to children. Children had to go to school torn clothes. It was also observed by a reporter that there was one North Dakota family who was found in extremely ragged condition, living in a flimsy shack in a temperature of minus twenty (Cravens and Mancall). Secondary education was considered a luxury for many Americans. Teenagers went observed spending more time working rather than studying. Political Impact Herbert Hoover was president in 1929. Though he was a good leader, but in such circumstances he did not know what to do. He always favored individualism and capitalism. He continued with that system, and did not involve federal government. Unfortunately, the economy did not recover. Unemployment increased. People began to get irritated by Hoover’s policies. In 1932 election, Franklin D. Roosevelt defeated Hoover. Roosevelt used federal money to support the unemployed and bring back the economy to its stable position. His optimistic attitude became the American’s strength. They all had faith in him that Roosevelt can overcome Great Depression (M. Lawson and A. Lawson). With his advent, he brought optimism under the flag of New Deal program. It brought reforms and policies that abandoned capitalism. The specialty of New Deal program was the speed with which it had recovered the loss so rapidly (Nelson). Psychological Impact Great depression not only influenced Americans politically and economically, but also changed people’s perceptions and thinking. It had greatly influenced the psychic of Americans. They had gone into such a depression especially small scale farmers and those people who were already poor before 1929, for them sustaining and retaining their livelihoods was a big deal. Many urban people were unemployed. Hunger was there in the society. People started accumulating goods, some people shifted to other places in search of jobs (M. Lawson and A. Lawson). Great Depression affected the psychology of Americans so badly that a tragic incident was observed by Elmer Powers, a famous farmer, in 1936. A middle-aged man was observed committing suicide. He did it because he was about to lose his farm (Cravens and Mancall). Unemployed men lost their self-respect because of the failure to support for themselves and their families. Feeling of negativity and pessimism bore in the hearts of Americans. Great Depression struck middle-class perception greatly. They lost their faith in the belief that hard work and determination can overcome poverty. However, when they overcome Great Depression, they regained faith in their original belief (M. Lawson and A. Lawson). Recovery Depression started to fade in 1940, when the government started heavy military spending. By 1945, service entered into the country. Unemployment level had reduced. Wages were increased as profits were started running the companies. There were contracts given by governments in which factories were hiring hundreds of unskilled workers and were given training to them, at government’s expense. The economy seemed to be improving with the passage of time. The journey of Great Depression started off in 1929 and lasted till 1941, which was quite the biggest period in the history (Koistinen). References Cravens, Hamilton and Peter C. Mancall. Great Depression: People and Perspectives. Greenwood Publishing Group, 2009. H. Young, William and Nancy K. Young. The Great Depression in America: a cultural enyclopedia. Greenwood Press, 2007. Koistinen, A.C.Paul. Arsenal of World War II: The Political Economy of American Warfare, 1940-1945. 2004. M. Lawson, Russell and Benjamin A. Lawson. Poverty in America: an encyclopedia. Greenwood Press, 2008. Nelson, Cary. "The Great Depression." 28 April 2011 . Pells, Richard H. and Christina D. Romer. "Great Depression (economy)." Britannica Online Encyclopedia Read More