The Great Depression & The Recession

1. The Great Depression & The Recession 1920’s – The Causes 1990-2008 – The Causes Government Deregulation Corporate Corruption Over-leveraging Banks Giving Risky Loans Drop in Home Values • Farm Overproduction • Falling Crop Prices • Sustained Drought • Stock Speculation • Decreased Foreign Demand • Buying Stocks on Margin • Huge Disparity in the Distribution of Wealth

2. Leads to … The Great Depression – 1929-1945 The Recession – March ‘09-Sept. ‘09 Home foreclosures increased 97% Unemployment Reaches 10.2 % GDP growth shrank more than 5% in two of the 2008 quarters Stock Market Prices Decline Major Companies and Financial Institutions Threaten Bankruptcy • Stock Market Crashes - 1929 • GDP drops from $103.6 billion in 1929 to $56.4 billionin 1933 • Unemployment reaches 24.9% in 1933 • Poverty Rate Rises from 20% in the 1920s to above 40% in the 1930s • Suicide Rate Increases: 12.1/1000 in 1928 to 18.1/1000 in 1929

3. I Was There … The Great Depression The Recession “If the terriers and bariffs are torn down, this economy will grow.”~ George W. Bush “Bankruptcy stared me in the face, but one thought kept me calm; soon I’d be too poor to need an anti-theft alarm.”~Gina Rothfels "If you were alive, they would give you a loan. Actually, I think if you were dead, they would still give you a loan." -- US financial commentator Steven Knobel, on lax lending standards among some US banks before the economic crash. • "If, with all the advantages I've had, I can't make a living, I'm just no good, I guess."38– An unemployed Texas schoolteacher, 1933 • "In other periods of depression, it has always been possible to see some things which were solid and upon which you could base hope, but as I look about, I now see nothing to give ground to hope—nothing of man."– Former President Calvin Coolidge, 1932 • "How many men ever went to a barbecue and would let one man take off the table what's intended for nine-tenths of the people to eat? The only way you'll ever be able to feed the balance of the people is to make that man come back and bring back some of that grub that he ain't got no business with!"– Louisiana Senator Huey P. Long, 1934

4. Government to the Rescue? The New Deal Yes We Can! • The Players Barack Obama Henry Morgenthau, Jr. Franklin D. Roosevelt Tim Geithner Ben Bernanke Hugh Johnson

5. The “Fix-It” Plans The New Deal Yes We Can Tax Rebates (Bush) Government Bailout of the Financial Industry First Home Buyer’s Rebate Extend Unemployment Benefits Stimulus Plan • Bank Holiday • Put People to Work (PWA, WPA, CCC) • National Recovery Administration – Stimulate Business and Provide Relief to Citizens • Restore Confidence in the Banking Industry • Social Security Administration

6. The Results (Effects) The Great Depression The Recession Unemployment Rate Has Increased Dow Jones, NASDAQ, Standard & Poors Showing Signs of Improving Major Financial Institutions Stay Afloat (AIG, Freddie Mac & Fannie May, Goldman Sachs) GDP Shows Slow Growth Government Debt Increases Dramatically Long Term Effects Still Remain to be Seen Home Foreclosures Level Off • GDP Shows Signs of Slow Growth • Republicans and Democrats Form Philosophies on How Best to Deal With the Economy • Unemployment Slowly Decreases • Government Bureaucracy Increases Greatly • Democrats Retain Control of the Government • Full Economic Recovery Doesn’t Take Place Until Entry Into WW II • Government Debt Increases Dramatically