American History from 1874 to 2000 - Research Paper Example

“Fix it up or do without” became the motto for the young people coming of age during this time in America’s history. And as with all things historic, this would surely influence what has been referred to popularly as The Greatest Generation, as they entered the years of war that came on the heals of the Great Depression. Identifying a cause of the Great Depression is tricky business. Many people look to the stock market crash of 1929 as an easy answer. This actually wasn’t the real cause of the economic problems, but it was a symptom of a desperately unhealthy economy (Davis 2003).

The stock market crash was a severe psychological blow to the American public. Writing this during the Great Recession that started over a year ago, some of the actions of investors in the years preceding the stock market crash of 1929 sounds like déjà vu. The stock market had for years been a place for the powerful elites of America to get even richer. They had access and knowledge of markets. The ordinary working classes steered clear. During the booming 1920’s this changed. The stock prices were rising so dramatically, middle class citizens were borrowing money to buy more stocks.

Getting rich quick was the order of the day. The problem started when European investors started to notice the amount of debt American companies and banks were incurring due to speculative stock purchases. Stock prices began to decline and panic set in. People sold their stock, or attempted to before they lost everything. Banks were swamped with customers that wanted to withdraw money, but there was no money because the banks had purchased speculative stocks that were now worthless. The social and economic fallout from the crash was considerable.

By 1932, just three years after the crash manufacturing and agriculture was suffering from deflation. The price of goods and commodities