Causes and Consequences of the Great Depression

In class, welcome to causes and consequences or effects of The Great Depression. The greatest economic crisis in the history of America. All right, if we're going to talk about the causes, we need to start in the 1920s. Here you have flappers, women dancing, the economy is great. Things are going well. But what we're going to see is that many of the seeds of The Great Depression were going on during the 1920s. One of them was industrial overproduction, which created a surplus of goods in America. Also during this time, the government wasn't limiting corporations or regulating it very much, right? They also weren't taxing these big corporate businesses either. So what did that create? Increased profits and more valuable stock. This was very inflated stock market or value of these companies, okay? Higher probably than it should have been. All right? So as the stock market increased, prices increased, all right? Products became more expensive. So why is that a problem? Well, the average worker is still getting paid the same old wages. So they can't afford these new products. And what problem did that create a growing gap between the rich and poor, where you have a few rich and many poor people? All right? So what now then? Well, because you're not getting an increase in your pay, you're getting the same old wages and products have become more expensive. You are under consuming. Which just means consumers were not buying as many things. Well, remember that industrial overproduction, now you have a surplus of goods, which was a fancy way of saying there's a lot of stuff left over on the shelves and Americans simply were not buying them, which hurt businesses. When businesses were hurt, they couldn't afford to keep their workers, and they began firing their workers. All right? Other factors that led to The Great Depression, installment buying and consumer overspending of the 1920s. Buying on margin, people thought they could get rich quick in the stock market and actually borrowed money to enter the stock market. Well, when it crashed, Americans lost everything. This all caused or led to the greatest economic crisis in American history known as The Great Depression. All right, let's look at some consequences or effects down. All right, because you had so much overproduction of the 1920s, you also had over farming, overproduction of the land. That led to combined with a drought that dust bowl, where wind would come by capture this land that had dust that was exposed and sweep it up into the air and caused this great storm of dust in the air and it led a lot of people from the Midwest to move to California to escape the dust bowl. All right? Other effects or consequences, bread lines. Because people don't have jobs, they don't have money, therefore they can not buy food, okay? So you have people waiting in line to receive free bread or soup or things like that. Obviously, unemployment. All right? Because of business overproduction and a surplus of goods, a lot of businesses couldn't afford to keep employees anymore or totally went out of business. So this led to people not having jobs. When you don't have a job, you can't pay for your house and many Americans were homeless. All right? One of the things that happened when they were homeless, they still needed a place to live. So they built things called hoovervilles. All right? Why were they called hoovervilles? You see these old shacks, okay? This is where Americans built these kind of shanty towns or makeshift houses. They were named after president Hoover, all right? We look to our president to solve our problems, and at the time it was president Hoover and guess what he said to Americans. The economy will correct itself. The government is not going to get involved. All right? So Americans blamed their president. And living in these shanty towns and shacks, they called them hoovervilles after that president that just wouldn't help them. That concludes our video. I'll see you guys in class.