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Lecture 33

History 1807 Lecture Notes - Lecture 33: John Maynard Keynes, Glass–Steagall Legislation, Procyclical And Countercyclical


Department
History
Course Code
HIS 1807
Professor
Jeffery Vacante
Lecture
33

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History of Business Lecture 33
The Crisis of Capitalism: The Great Depression
1920 public mind, jazz, liberalism, area of great prosperity but the prosperity is sitting at the
top and this prosperity I being enough at the top and this because they have greater access to
means to increase their wealth, stock market, credit, etc.
1929 stock market crash because more and more people where investing in these great big
companies and the more people do this the more the company is wealth and the more the
company has access to those individuals these companies because flushed. These companies
are taking the money and are buying stuff for the themselves or pouring the money back into
the company and making them more efficient, productive.
Stock market crash does not create the great depression
1920 a lot of people didt hae the oney to buy the stocks so they were borrowing the
money to buy the stocks
Hoover said ot to orr its a eessar orreted for a oerheated market. He does
othig. Doest eliee people that the goeret eeded to fi the rash
He believed that it was only the wealthy money that was being effective by the stock
market but he forgot that the mass of the population was effective
So he tried to encourage people to put money into the bank but no one did because
people were scared of the bank failures
Baks go akrupt eause people dot hae the oe to ak loas ad those people also
dont have anything for the bank to take so the bank as to take the loss
1910/20s individuals were encouraging to take their extra money and invest it in to the stock
market. The money in the bank would be taken by the bank and the bank would take it and
invest it for the stock market for you.
If you wanted people to save money you make interest rate high
If you wanted people to spend money you would make the interest rates low
People were convinced to put the money in banks and have the money invested in these
companies. The savings of the regular people becaisme the problem for the stock market crash
in 1990s.
Causes of the depression (NOT FINISH)
The stock market crash of 1929 precipitated a series of events that revealed the fragility
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