Great Depression and Economy

¶ … Great Depression Although there are few Americans alive today who actually lived through the Great Depression, the event exacted an enormous toll on the country's and ultimately the world's economy in unprecedented ways, and some contemporaries questioned whether recovery was ever possible. To determine the facts, this paper reviews the literature concerning the Great Depression to identify is causes, including the financial, ecological and speculative reasons for the crash of the American economy.

Finally, a discussion concerning the gradual recovery that spelled the end of the Great Depression is followed by a summary of the research and important findings concerning this seminal event in American history in the conclusion. Review and Discussion Although precise figures remain elusive, historians estimates that at least one-quarter and perhaps even more of the American workforce was unemployed during the period following the stock market crash in October 1929 through 1932, and 9,000 banks failed (Byas, 2016).

This dismal period in American history was characterized by so-called "Hoovervilles" populated by desperate, impoverished people as well as soup kitchens and bread lines (Byas, 2016). Notwithstanding the lack of precise figures, Byas emphasizes that, "No one disputes that it was a desperate time" (2016, p. 34). Just as historians do not agree on precise figures, they are also divided concerning the causes of the Great Depression as discussed further below.

Financial causes of the Great Depression Despite deepening financial problems across the country, including a shrinking gross domestic product for 4 years straight and the failure of more than 100,000 American businesses, Warren Harding refused to take action while he was president from 1913 to 1921, preferring a laissez faire approach based on his belief that a free market economy would right itself in time (Byas, 2016).

Although Harding's inactions did not "cause" the Great Depression just as President Franklin Roosevelt "brought us out of it," Harding did set the stage for this enormous economic downturn (Byas, 2016). For instance, during his tenure, Harding oversaw the creation of the Federal Reserve System ("the Fed") in 1913 which responded to slumps in the economy with massive infusions of cash rather than permitting normal market corrections to occur (Byas, 2016).

As Byas concludes, "When the bust finally came in 1929, it was much more serious than it would have been had the Fed taken its foot off the money accelerator earlier" (p. 34). There were other causes of the Great Depression as well, though, including the Dust Bowl discussed below.

Ecological causes of the Great Depression As if Americans did not have enough to worry about during the Great Depression, nature itself seemed to turn against the country and the Dust Bowl years during the early 1930s caused more than 2.5 million to flee from the devastation in Oklahoma, Texas, Kansas and Colorado to California where they expected to find work (Joseph, 2003). This massive domestic movement of people only further exacerbated the deprivations of these migrants who came to be called "Okies" irrespective of their states of origin (Joseph, 2003).

Speculative causes of the Great Depression A so-called "speculative class" emerged during the 1850s that morphed into a "fever of speculation" during the late 1920s that was fueled by the.