U.S. History -- Great Depression

U.S. History -- Great Depression No single factor predicated the Great Depression, which lasted throughout the bulk of the 1930s. However, the stock market crash of 1929 may be the easiest scapegoat and the most powerful symbol of the economic downturn that resulted after the "roaring twenties." The Great Depression arrived on the heels of the First World War.

Viewed from a global perspective, nations in Europe as well as North America contributed to the Depression because of the failure of the marketplace to adapt to the widespread inflation following World War Two. The "roaring twenties" signified instability and weakness, as much of the boom was due to speculation and investments made on borrowed money. European nations also found themselves heavily in debt from war expenditures and reparations, and unable to afford the goods and services proffered by the United States.

As a result of a sharp downturn in international commodity trading, the American economy suffered a severe collapse. With enormous debt incurred at the macro- and microeconomic levels, banks issued fewer loans to entrepreneurs and investors, resulting in the American stock market crash. All industry, including agriculture, suffered huge blows and millions of Americans as well as people around the world lost their livelihoods.

Only the wealthiest Americans remained relatively unscathed, as the majority of Americans: the working class, the poor, and the burgeoning middle class, lived at best from hand-to-mouth. Because of his alleged mishandling of the recession and depression, President Hoover lost the 1932 election. When he assumed office, Franklin D. Roosevelt began a series of economic and social reform programs that would offer Americans a "New Deal." Some of FDR's New Deal programs remain in place, testimony to the President's legacy.

For example, most Americans are familiar with the acronym FDIC from their bank's fine print. Roosevelt started the FDIC, the Federal Deposit Insurance Corporation, to offer incentives to both banks and consumers to help rebuild the American economy. Because of its continued value, the FDIC remains a significant financial institution. Similarly, FDR initiated the Securities and Exchange Commission. FDR served four terms and would be the last president to serve more than two terms in office.

The New Deal was built upon Roosevelt's belief in the power of the federal government to alleviate the financial woes of the nation. Although unpopular to some, many of the New Deal programs proved to be promising in both the short- and the long-term. Opponents of the New Deal generally disagree with the theory of big government; the New Deal epitomizes big government but in the wake of the Depression only such broad programs could have taken root and alleviated the suffering of so many Americans.

The New Deal definitely contributed to the American economy's revival but the Second World War would help, too. One of the reasons for the Great Depression, according to Roosevelt and his supporters, was the proliferation of big business, trusts, and monopolies. The Industrial Revolution meant that many huge conglomerates controlled the bulk of the market and thus, of the American and global economy. With so much trust placed in the hands of so few, average consumers had little power and fewer assets with which to control or.