Wall Street In America

1899 Words8 Pages
Wall Street and it is a street located in Lower Manhattan, New York City. Wall Street is the heart of United states when it comes to economics. It represents the financial and economic powers of the country. All the big financial firms have planted their roots from the early days and have managed to control the economy for many years. Those companies have a lot to say about our economy and have managed to increase or decrease our financial growth. Wall Street is where all the money in country flows through. Wall street is so big that most people say “it is too big to fail” and people think it has too much control over our economy which makes it very dangerous. In the past, Wall Street has caused many financial crises such as “The Great Depression”,…show more content…
Mainly in the United States, personal income, prices, profits and tax revenues dropped drastically and international trade declined more 50%. Overproduction forced business to lay off employees, which caused unemployment to rise 25% while some other countries had even more people getting laid off. Since the banks failed, Rich people lost a lot of their saving causing some people to commit suicide. The crime rates were all time high and a lot of business filed bankruptcy. Most Important of all was higher education was out of reach of many people. “Life was hard for children during the Great Depression: kids had to do without new clothes, shoes, or toys, and many couldn't attend school because they had to work. Even so, life still had its bright spots.” (Freedman, 2005). This quote by Freedman explained the life of children who had to work to help their parent put food on the…show more content…
Wall Street affects the U.S economy in many ways, but the most influential ones are wealth effect as people tend to spend more when their net income or valuable assets increase in value and this makes the consumers more confident and comfortable as they are willing to invest more money into the economy which is beneficial which can have positive when consumers are willing to spend and negative when people are not confident which lowers the GDP. Another way is that, during an expansion, markets use their stocks to raise capital, which can then be used to reinvest to have higher economic output and hire more employees which eventually leads to having a better GDP. However, there are criticisms of how Wall Street works. Some people think that it is a rigged market based many convictions and scandals that have occurred in the past. It can cause an economy to enter a recession as is proven in the Great Recession of 2008-09. Also, they always use taxpayers’ money to bail themselves out as proven in the
Get Access