The Great Depression of 1929 - Undigested Lesson
The economy, and it is possible that in general everything in nature, develops cyclically: the rise - flourishing - stagnation. And again in a circle. Following the consumer boom of the twenties, an era called F.S. Fitzgerald's “Jazz Age”, the Great Depression of 1929 began.
Like everything big and scary, the Great Depression in America came unexpectedly. “Cheap money” in the form of low-cost loans has inflated Americans' consumption of vital material goods to unprecedented proportions. Low-skilled workers and cleaners, dishwashers and waiters became the holders of shares, the issue of which reached a supercritical level. The economic activity of entrepreneurs was not controlled and not regulated by the state, which was implementing the policy of then-President Herbert Hoover, who was convinced that only complete freedom of business could be a guarantee of prosperity. And then the bubble burst, it happened on Thursday (later it was called “black”), on October 24th.Then followed Friday, Monday, and Tuesday, which were no lighter, and many more days, weeks, months, and years until 1939 itself. Shares rapidly became cheaper, their price in strict accordance with the laws of the free market fell due to their astronomical quantity and extremely limited solvency of the population.
American city of Hooverville
The Great Depression mercilessly hit agricultural producers, millions of farmers were completely ruined. The collapse of the real estate market has generated huge numbers of homeless people who have lost the ability to pay off mortgage loans. Entire cities that had previously flourished were left without a population, but on the other hand, Gowerville was built en masse - areas consisting of huts for which rubbish served. In honor of the President of the United States, many newly invented garments, mostly made from newspapers, were named - insoles for leaky shoes, blankets and many other things that warmed the hungry, homeless and unemployed, numbering in the millions. A wave of suicide, like the Great Depression, swept all sectors of society indiscriminately.Shoe cleaners and former millionaires also took their last points to life. For free food lined up long lines. And what about Hoover? One can admire such an enviable persistence of economic convictions, but it would be better for her to find another use.
The Great Depression has affected all aspects of the lives of Americans and citizens of other countries that have become its victims. The collapse of the most powerful economy in the world has affected the market situation in Europe, South America and other lands, sometimes very remote from the epicenter. Marxist idealists predicted the imminent end of the whole system of capitalism and the world revolution. The grounds for such forecasts were. As often happens in rapidly impoverished societies, the sympathies of the masses were conquered by authoritarian and even totalitarian leaders. The idea of taking everything and sharing, captured the minds. At that time, Mussolini was recruited, Hitler and, oddly enough, Hugh Long - the governor of California, who was also a supporter of a kind of social equality. Not knowing the true state of affairs in the USSR, American workers and farmers sympathized with Stalin, to whom the Great Depression was only at hand.The Bolivian-Paraguay conflict, caused solely by economic reasons, claimed thousands of lives. Milk, which did not find customers, was poured directly into the sewage system, coffee was poured into the ocean or burned instead of coal. Demonstrations of disgruntled people in the USA were ruthlessly shot by police and troops. Show business has bloomed abnormally. People sought solace in cinemas, and Hollywood generously supplied them with dreams.
End of depression
All this horror someone had to stop. Only a powerful state apparatus could cope with this task. "New Deal" by President F.D. Roosevelt became a healing potion against a deadly disease called the Great Depression. Active intervention in all aspects of the macroeconomic life of the United States in order to improve it, as opposed to Hoover’s passivity, began to gradually reduce the temperature of the crisis. The first steps of Roosevelt were measures to reorganize the banking system. Millions of unemployed were attracted to the construction of infrastructure, mostly roads. It is interesting that Hitler, having come to power, also began with this. By the time of the Second World War, the situation had improved significantly, and with its inception, the US industry had become fully operational.