Economic Crisis throughout History

As our economy began to falter in December 2007 and plummeted into the current recession in September 2008, many Americans thought back to the horrors and hardships of the Great Depression. The Great Depression proved a difficult time for America, a time nobody wanted to ever see again. Sadly, many of the children from the Great Depression have lived to witness a time with many similarities, and yet many differences, to the economy crash of 1929.

The stock market crash on October 29, 1929 set in motion many events leading to the Great Depression. Although this day is considered the trigger to the massive economic fallout, the American and global economies had been in turmoil for six months prior to Black Tuesday, and many other factors contributed to what’s known as the worst economic crash in modern history.

With few regulations on the stock market in the years leading up to the Great Depression, investors were able to buy stocks on margin, only requiring them to put down ten percent. This caused for wild speculation, and many people funneling their life savings into the stock market, which led to artificially high prices. After Black Tuesday, many people began to believe that the banking system in America was going to fail. Thousands flocked to the banks to withdraw their money. With so much output, and so little input, banks nation-wide began failing. In the first eight months of 1930, seven hundred forty-four banks went under.

During the 1920’s only one percent of the population owned forty percent of the nation’s wealth. But when the stock market crashed, the rich entrepreneurs, and the lower class citizens alike, lost everything, and the unemployment rates soared. Not only was high unemployment rates caused by the st...

... middle of paper ...

...nd people just trying to sell their homes were harmed by this because there were items available for a lower price. Putting regulations on the percentage a loan can be, and the ability to give out risky loans would assist in averting this crisis in the future.

In the life span of one person, a country can go through many wars, it can be the cause of a global economic crisis and come out as the world leader, and somehow fall right back into economic hardship. This is the life that many who lived in the Great Depression have seen. They must wonder how America didn’t see the salient signs pointing to the recession, seeing as almost the same thing happened only eighty years earlier. The commonalities are vast, the differences, few, but it call comes back around to the lesson people are bound to figure out someday: Learn from History, because it always repeats itself.