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Lecture

History 2201E great depression.doc


Department
History
Course Code
HIS 2201E
Professor
Prof

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History 2201E
Henry Ford and the Model T
Assembly line
Model T first mass produced car 2nd largest selling car in history
Explosion in production best example of early mass production
America becomes the first automotive country
By the time the depression hits 1 in 4 families have a car
Advertising industry creates rationales for mass consumption
What we start to see is a shift on how products are being sold they would sell
goods on the pretence that these goods will give you things that you want like status and
love.
Economy is based upon personal consumption when people stop buying depressions
hit.
Why did the great depression happen?
Began in 1929 and ended around when the Second World War began (unemployment
began to lower once the us entered to the war)
The great depression started in the United States and spread throughout the world
“Spread like a virus”
Rapid decline in the production and sale of goods and a spike in unemployment many
businesses closed down and people lost their homes and savings and many people had to
rely on charity
15 million Americans out of work in 1933 that is ¼ of the workforce and many others
and underemployed many people and zero income.
FDR was elected for a third and fourth term as president and his administration lead
the new deal
Answer: economists still argue about the cause. Many people argue it was because the
stock market crashed but this is too simple an answer.
The 1920s was a decade of prosperity but it was not shared equally
Huge inequality of wealth corporate profits grew by 65% between 23 and 29 and
working people profits grew 8% which was lower than the rate of inflation
The richest 1% had more assets than the bottom 50%
People no longer had enough money to keep consumer spending at the same level
People are buying things on credit
Peoples incomes are barely able to keep up with paying for the interst of their old
spending and they cannot buy new things
The consumer bubble bursts
Panic began and people started selling their stocks in the hope that they would not lose all
their money
Oct 29 1929 15 billion $ lost
In Nov everything that was gained in the last two years was whipped out
The Dust Bowl:
Began in the 1930s large drought
Topsoil turns to dust
Just made the situation worse
Hoover keep a balanced budget cut funding allow the depression to work itself
out he did offer banks some money
Hoover is emerging out of the liberalism believes that people should be solving
problems on their own without government intervention
Hoover ends up taking the blame for the depression
Hooverville slum town build shacks often in parks
5 thousand banks had gone out of business there was no insurance on the money you
put into banks anything that they put into banks are gone
1932 FDR wins the election in a wheelchair had polio
FDR wins by a huge amount
FDR said “the only thing we have to fear is fear itself”
What was the New Deal?
Gigantic package of new legislation
What did it do public works
Government spends money on things it needs anyways roads sewage systems schools
this was to reduce unemployment
Lots of new rules for banking and the stock market
The creation of social welfare measures for the need sick disabled and elderly
Agricultural adjustment act encouraged them to reduce the amount of crops grown
WPA Works progress administration
Had programs to encourage the arts
Designed to deal with the effects of the depression
This was a full scale government expansion and involvement within the economic
planning
Fundamental transformation between people and their government
Key factor of the new deal was a political coalition called the new deal coalition this is a
liberal political alliance that backs the new deal and consist of many modern liberals in
the Democratic Party a lot of American intellectuals and a lot of ethnic minorities flocked
to this political group
Flow of black people into the Democratic Party normally they did not vote for the
democratic because the democrats where the party of the south
Labour unions also supported the democratic people and the new deal
And working people i.e. farmers this will form the backbone of the Democratic Party
up until the1960s
What does this have to do with liberalism and conservatism?
People who support smaller governments with little intervention begin to call themselves
conservatives self reliance the American dream the frontier thesis
And new liberals are those who support public works programs and government large
scale intervention