Classical School Of Thought And The Great Depression

Following the economic boom of the 1920s, there was a period of economic depression. The United States and its citizens were greatly affected. There were many economic problems that occurred such as unemployment rate rising tremendously and many more. Herbert Hoover and Franklin D. Roosevelt were presidents during that time and dealt with the economic problems. They helped create programs to financially stabilize the country again. The Great Depression ended when the United States entered World War II.

Two major economic thinkers of the of the early twentieth century, John Maynard Keynes and Friedrich A. Hayek, hold very different economic viewpoints. Keynes is among the most famous economic philosophers. Keynes, who's theories gained a reputation during the Great Depression in the 1930s, focused mainly on an economy's bust. It is where the economy declines and finally bottoms-out, that Keynesian economics believes the answers lie for its eventual recovery. On the other hand, Hayek believed that in studying the boom answers would be provided to lead the economy out of the bust that was sure to follow. Hayek backed the Austrian school of economics.

The Great Depression was a dark time in American history that lasted from1929-1939. It began after the Stock Market crashed on October 19, 1929. According to A Biography of America: FDR- The Great Depression, “It was the deepest and longest lasting economic downturn in American History” (A Biography of America). As a result of the Great Depression one out of every four Americans was out of work. The Great Depression resulted in a life for Americans that was plagued by overproduction and under-consumption of products, starving families were forced into bread and soup lines, and thousands of agricultural workers became migratory workers in order to survive.

How does one keep faith in a country during times of destitute and agony? In 1929, the stock market crashed. Poverty struck the country fast like the huge dust storms in the west. The new president, F.D.R, promised to relieve, recover and reform the country with various organizations. Churches and other groups set up food lines. F.D.R’s main goal was to put every American to work. The dilemmas of the Great Depression were soon set out to be handled by actions by the federal and state governments.

Conservatism is described as a political belief with emphasis on traditional values and practices. In the 20th century conservatism exist, but in varying degrees. Some were conservative in specific areas, such as the economy.

Each president from Theodore Roosevelt to Herbert Hoover faced his own unique set of situations during their tenure, ranging from railroad regulation to the Great Depression. Though each presidency required different solutions for which the public had to be shaped, through spin, in order to resolve a situation in a manner the president saw fit, some presidents such as William Howard Taft, and Warren G. Harding are not as well known for their use of spin. Due to the varying technological and communicative advancements like the introduction of press conferences and the invention of the radio; and the different events, such as World War I, and the Great Depression that resulted in the change in public perceptions of spin, the extent to which each president used spin changed because the circumstances under which each president had to preside over changed, so each president had to build their presidency off of their predecessor’s successes and failures.

During the 1920’s America was experiencing great economic growth. As WWI was ending Americans were out of energy. For almost 100 years they had been facing the problems of sectionalism, civil war, reconstruction, imperialism, and WWI. By the end they were ready to just sit back and party. Demand sky-rocketed and brought great economic growth. Americans failed to see the great problem looming overhead though. The Great Depression was caused by a combination of factors- a natural slowdown of the business cycle, weaknesses of the 1290’s economy magnified the slowdown, the republican response failed to help, a great environmental disaster, and the collapse of the world economy all contributed to the cause of the Great

"In other periods of depression, it has always been possible to see some things which were solid and upon which you could base hope... but as I look around about, I now see nothing to give ground to hope.” This great quote was made by former president, Coolidge. In the great depression people in cities and towns already lost too many jobs. Farmers struggles have already been happening since the 1920s, and farmers tried to do anything to save their farms. However, farmers may have been better off than city folk. The government tried to pitch in multiple times, but did not succeed as people hoped. After the great depression, people were all shaken up and scared. Also Hoover, was not very much liked during this time

The late 1930s were a time of great suffering and uncertainty in the United States. The country was crippled by effects of the Great Depression; the result was a massive decline in jobs and economic stability that dramatically impacted both rural and urban communities. Millions of Americans were out of work, unable to support their families. State organizations and charities were unable to meet the growing needs of the people and many were left to fend for themselves. The Great Depression brought with it a legitimate, tangible fear about the future of America and its citizens. Upon the outcry of the American people a “New Deal” was struck giving the citizens of America a lifeline of hope in the ever-growing State. The New Deal was a succession of programs, organizations and laws, enacted by President Franklin D. Roosevelt, directly addressing the issues of jobs, welfare and uncertainty through direct federal involvement. The creators of the New Deal worked across party lines to reshape the norms of state involvement whilst making a great legislative effort to turn the declining economy around. The New Deal reshaped the federal government’s relationship with its citizens in a time of economic uncertainty helping to grow the State in a time of peace.

During the Great Depression era, many presidents found themselves sliding between political ideologies. They would identify with one, but also enact policies that fall unto the other side. They slid back and forth between being Liberal (or more Democratic) and being Conservative (or more Republican). The ideologies for each side bore a massive difference. The Democrats would favor help from the government while the Republicans chose to go with the attitude of it’s up to the people to make a difference - hard work and no help. The two presidents of this era, Herbert Hoover and Franklin Delano Roosevelt, had different policies abiding to their different sides. While these policies differed from the expected ideologies, they fall closely into what one would expect from today’s political parties.

Cecchetti, Stephen G. "Understanding the Great Depression: Lessons for Current Policy ." Monetary Economics (1997): 1-26.

     The Great Depression was a huge economic downfall in North America and involved many other industrialized countries of the world. The Depression began in 1929 and lasted for about ten years. Millions of people lost their jobs along with many businesses going bankrupt. The common misconception of the Great Depression is people think that the stock market crash was the main cause for it. There were many causes for the Depression; unequal distribution of money during the 1920’s was the main cause of the Depression. This unequal distribution happened on many different classes of people. The imbalance of money is what created such an unstable economy. The stock market was doing much worse than people thought

The world had faced two main economic problems. The first one was the Great Depression in the early of 20th Century. The second was the recent international financial crisis in 2008. The United States and Europe suffered severely for a long time from the great depression. The great depression was a great step and changed completely the economic policy making and the economic thoughts. It was not only an economic situation bit it was also miserable making, made people more attention and aggressive until they might lose their lives. All the society was frightened from losing money, work and stable. In America the housing market was the main factor of the great depression. A crisis of liquidity appeared in the banks forming a credit crunch. This period was influenced by over extended stock market shortage of water in the south and over trusting. The American government put down some regulations to control the productions which were essential for the war.

The Great Depression of the 1930s was the economic event of the 20th century. The Great Depression began in 1929 when the entire world suffered an enormous drop in output and an unprecedented rise in unemployment. World economic output continued to decline until 1932 when it clinked bottom at 50% of its 1929 level. Unemployment soared, in the United States it peaked at 24.9% in 1933. Real economic output (real GDP) fell by 29% from 1929 to 1933 and the US stock market lost 89.5% of its value. Another unusual aspect of the Great Depression was deflation. Prices fell 25%, 30%, 30%, and 40% in the UK, Germany, the US, and France respectively from 1929 to 1933. These were the four largest economies in

developed his theory based on the Adam Smith’s theory. Keynes did not entirely disagree with