HST 210 Lecture Notes - Lecture 9: Reconstruction Finance Corporation, Stock Market Crash, January 30
22 Apr 2016
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Seen as the beginning of the depression; it"s not the cause, but a symptom of the downward spiral that was to come. They"d already come into a recession in the summer before october. Now we can produce enough for everybody; but they didn"t stop when everyone had enough. Rich were getting richer, and the poor were getting a little richer much slower, so the gap was growing. General population doesn"t have enough money to buy as much as was being produced. Companies don"t need to produce as much now that consumption is satisfied, so they lay off people who now don"t have money to consume in an oversaturated consumption market. Buying on the margin was also a cause. People lose confidence in the stock market and banking system, and so they stop investing in it. Pulls money from the economy which makes it weaker.
