The great depression the great recession
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The Great Depression & The Great Recession PowerPoint PPT Presentation

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The Great Depression & The Great Recession. THEN: Stock Market Crash. October 29, 1929 Investors ruined and banks closed: businesses can’t grow businesses forced to cut back on production, lower wages or layoff workers. WHY?: Margin Buying/Speculation.

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The Great Depression & The Great Recession

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The Great Depression&The Great Recession

THEN: Stock Market Crash

  • October 29, 1929

  • Investors ruined and banks closed:

    businesses can’t grow businesses forced to cut back on production, lower wages or layoff workers

WHY?:Margin Buying/Speculation

  • Paying a small part of a stock’s price as a down payment and borrowed the rest. When the prices went up, one would sell the stock, pay off the loan, and keep the profit

  • System worked as long as stock prices kept rising!!

NOW:The Housing Crash/Speculation

THEN:Unequal Distribution of Wealth

  • By 1929 the top 10% of the nation's population received 40% of the nation's disposable income

  • Salaries so low, people couldn’t buy what they wanted/needed

  • Farm income declined 66% from 1920 to 1929

NOW:Occupy Wall Street

NOW:Occupy Wall Street

In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers)

NOW:Occupy Wall Street

THEN: Unemployment


April 2011 - Unemployed workers wait to file claims outside a state office in Los Angeles, Calif.

THEN: Bank Failures

  • Banks in the 1920’s loan too much $$ to investors

  • Market crashers . Banks not paid back from investors so they can not give the depositors their cash.


NOW: Bank Failures

THEN:Installment Buying

  • Allow people to purchase on credit, and people piled up debts.

  • They used their money to buy on margin, hoping that prices would rise and they would make a profit

  • When people cant pay back debt, it results in a cutback in spending….which leads to??????

  • Inflation: By 1929 71% of American families earn less than $2500/year(minimum needed to live decently)

  • However- top 0.1% had a combined wealth of the bottom 42%

NOW:Credit Debt

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