what is the root cause of economic recession in 1929-1933?
396975
The stock market crash of october 1929, pulled a lot of money out of the American economy. Less capital => less investments => less jobs => less salaries to spend => even less capital to invest.
302698
When Roosevelt was inaugurated in March 1933, the U.S. was at the nadir of the worst depression in its history. A fourth of the workforce was unemployed. Industrial production had fallen by more than half since 1929. In a country with limited government social services outside the cities, two million were homeless. The banking system was on the point of collapse. There was little violence, but most observers considered it remarkable that such an obvious breakdown of the capitalist system had not led to a rapid growth of fascism (as happened in Nazi Germany). Instead of adopting revolutionary solutions, the American people had turned to the Democrats and to a leader who had grown up in privilege.\n\n\nThe First New Deal, 1933-1934\nRoosevelt indeed had few systematic economic beliefs; he relied heavily on a Brain Trust of academic advisors from leading universities. He saw the Depression as partly a matter of confidence—people had stopped spending, investing, and employing labor because they were afraid to do so. As he put it in his inaugural address: "the only thing we have to fear is fear itself." He therefore set out to restore confidence through a series of dramatic gestures.\n\n\nBanking crisis\nA high priority in the first "Hundred Days" was stabilizing the financial system. By inauguration day, state governors in every state had ordered banks closed or placed restrictions on deposits (as bank closings increased, this created more panic as depositors in other states rushed to withdraw funds before a state-imposed holiday was declared in their own states).[3] Roosevelt issued Proclamation 2038 on March 6 ordering "all banking transactions" be suspended through March 9, "in order to prevent the export, hoarding, or earmarking of gold... or currency." On March 9, Roosevelt told Congress in person, "Our first task is to open all sound banks." To accomplish this he asked for and received emergency legislation giving him control over all banks. The same day he received authority to "open such banks as have already been ascertained to be in sound condition, and other such banks as may be found to require reorganization to put them on a sound basis." Thus, all the nation's 19,000 banks had to be inspected before they could reopen. In all, 4,004 banks never reopened; most were small, with an average of $900,000 in deposits. They were merged into stronger banks and eventually the depositors got about 85% of their deposits back. (Historical Statistics X741-7555) At first, Roosevelt opposed bank insurance, but in June he reluctantly signed the Federal Deposit Insurance Corporation (FDIC) law to insure bank deposits. Angered at efforts to manipulate the dollar-gold ratio by European speculators, on April 5th 1933, Roosevelt issued Executive Order 6102 that required all persons holding more than $100 in gold coin exchange it for paper money at face value. After January 1934, he then devalued the international value of the dollar by 40% in terms of gold, hoping to stimulate exports. (Freidel 1990 p 101-2)\n\n\nRelief\nDuring the first hundred days of his administration, Roosevelt used his enormous prestige and the sense of impending disaster to force a series of bills through Congress, establishing and funding various new government agencies. These included the Federal Emergency Relief Administration (FERA), which granted funds to the states for unemployment relief, and the Civilian Conservation Corps (CCC) to hire 250,000 young men to work on rural local projects, as well as the first Agricultural Adjustment Administration (AAA). The AAA tried to force higher prices for commodities by paying farmers to take land out of crops and cutting herds. In 1936, the U.S. Supreme Court found the AAA to be unconstitutional.\n\nRoosevelt's series of radio speeches, known as Fireside Chats, presented his proposals to the American public. The informal chats not only reassured liste
1062741
they didn't give ya the time of day cuz you are doing good probably. you can cause recession with any thing you put in your mouth- the trick is to be gentle yet thorough
4150
Most definitely. As the leader of the United States during arguably the most difficult time of our history, he pushed Congress to pass emergency bills and reform measures that helped improve the economic situation in the eyes of the public. Though many historians say the beginning of World War II ended the Depression, I think that if it weren't for FDR's leadership, American morale would have fell too far to possibly recover economically.
989264
I was not around then but definitely studied history and this comes to mind:\n\nPresident H. Hoover, 1932 - government loans to banks.  End of November 1,493 banks have suspended operations.  \n\nIt already started crashing from the America's economy in the 1920's to a sudden end in Oct 1929 - before the Wall Street Crash.   Then America started facing economical crisis that even impacted other coutries including Germany, a country that built up their economy on American loans.  Then the wealth from the 20's was dissapearing fast.\n\nThe rich lost money on Wall Street crash. The rest of Americans could not afford to lose any money then. Afterwards, noone had money to invest nor to buy comsumer products. \n\nThere was not shopping of any kind, and stores, factories, farmers, restaurants, industries, had no reason to employ people who were making products that were not being sold. \n\nUnemployment reigned. The depression took a while to get going but by the winter of 1932, it reached his top.\n\nAt the time there where: 12 million people out of work, 12,000 people being made unemployed every day, 20,000 companies had gone bankrupt, 1616 banks had gone bankrupt, 1 farmer in 20 evicted, and sadly, 23,000 people committed suicide in one year - the highest ever in the history of the US.\n\nIn addition: we had many social problem which, in spite of being such rich country we continue to have.  They were and still are:\n\nUnemployment and poverty \nBreakdown of families\nSoaring high school dropout rates (2 to 4 million)\nHomelessness\nOrganized protests\n\nAt the time, the American people  laid the blame on:\n"Three B's" then responsible for the Wall Street Crash and the Depression:\n\nThe "Bankers"\nThe "Brokers"\nThe "Businessmen"\n\nI am not sure this answer your question but that what I thought of as soon as I saw your date onthe screen!\n\nBye....
63499
The Wall Street Crash of 1929, also called the Great Crash or the Crash of '29, is the stock-market crash that occurred in late October, 1929. It started on October 24 ("Black Thursday") and continued through October 29, 1929 ("Black Tuesday"), when share prices on the New York Stock Exchange (NYSE) collapsed. However, the days leading up to the 29th had also seen enormous stock-market upheaval, with panic selling and vast levels of trading interspersed with brief periods of recovery.\n\nThe stock market lost 40% of its value in September and October of 1929. From a high of 381.17 on September 3, 1929, to a low of 41.22 in July, 1932, the Dow Jones Industrial Average lost 89%.\n\nBoom-bust theory\nKeynesian, Monetarist, and Austrian economists agree that the Crash followed an alleged speculative boom that had taken hold in the late 1920s, which had led millions of Americans to invest heavily in the stock market, even borrowing money to buy more stock. Banks lent heavily to fund this share-buying spree.\n\nThis investment drove share prices up to artificially high levels; the rising share prices encouraged more people to invest, as they hoped the shares would rise further, thus fueling further rises, and creating an economic bubble. On October 24, 1929 (with the Dow just off its September 3rd peak from at 381.17), the bubble finally burst and panic selling set in. Thirteen million shares were sold in the space of one day, as people desperately tried to dispose of their shares before they became worthless.\n\nOver the following few days another thirty million shares changed hands and share prices collapsed, ruining many investors.\n\nThe banks which had lent heavily to fund share buying found themselves saddled with debt, which caused many banks to fail.\n\nWhile millions of people lost their savings, businesses lost their credit lines and were forced to close, causing massive unemployment.\n\nThe crash dramatically worsened an already fragile economic situation, and was a major contributing factor to the Great Depression. There is a good deal of controversy among economists and historians about the nature of that contribution, though. Some hold that political over-reactions to the crash, such as in the passage of the Smoot-Hawley Tariff Act through the US Congress, caused more harm than the crash itself.\n\nExplanation from supply-side economic theory\nMany commentators view the Smoot-Hawley Tariff Act as a consequence of the Crash, since the act was not signed by President Hoover until June of 1930. However, supply-side economists (and others) argue that stock-market prices anticipate future profits. The Crash reflected investors’ rational expectations that tariffs would raise prices for U.S. consumers (both final consumers and manufacturers that used the imported products as inputs) and reduce firms’ future profits.\n\nSupply-siders also blame two tariff laws for the earlier, sharp recession of 1920-21.\n\nThe Crash of 1929 and the subsequent Great Depression were in part longer and deeper for three reasons: [9]\n\nThe Smoot-Hawley Tariff Act applied tariffs to more than 3,200 products (many more than the previous tariffs). \nThe tariff rates were very high — averaging 60%. \nOther countries responded by enacting their own tariffs against U.S. goods in retaliation.
127127
He was president when the great depression started, I remember my dad talking about it and said he was at least partally to blame by his fiscal policys. Hey Bush take a lesson here supply side economics does not work, never has never will.
431109
Economic recessions lead to a shrinking job market because people don't have as much money to spend and therefore businesses lay workers off and minimize hiring.  \n\nThe military then becomes a good option for the unemployed.
697097
One reason was a major draught (sometimes called the "dust bowl") which caused produce to cost a lot more and made many farmers poorer becasue they had no crops to sell.\n\nAnother reason was the lack of distribution of the wealth. The rich were very rich, and the poor were very poor.\n\nanother was a lack of federal safeguards for banks. when the stock market crashed, many people took out all their money and the major financial institutions failed.\n\nhere's a quote from one source:\n"The U.S. economy was also reliant upon luxury spending and investment from the rich to stay afloat during the 1920's. The significant problem with this reliance was that luxury spending and investment were based on the wealthy's confidence in the U.S. economy. If conditions were to take a downturn (as they did with the market crashed in fall and winter 1929), this spending and investment would slow to a halt. While savings and investment are important for an economy to stay balanced, at excessive levels they are not good."
274539
The US economy has a history of cyclical highs and lows.  Most of the others were called 'Financial panics'.  See the bottom of this wikipedia page for more:\nhttp://en.wikipedia.org/wiki/Panic_of_1873\n\nThese lows are charecterized by job loss, banking failures, forclosures, loss of property value and bankruptcies.\n\nIn addition, there have been several recessions, which were like mini-depressions.  In the 1980's sections of the country had housing-value crashes and unemployment was high.\n\nSocial Security was put in place because people who are elderly when a economic downturn strikes can see their lifelong savings wiped out when they have no means to earn it back.  The old-fahioned word for retirement during a economic downturn can be found in the census records: pauper.
588792
The Great Depression of 1929 was a worldwide economic downturn, starting in 1929 and lasting through most of the 1930s. It ended at different times in different countries. Almost all countries were affected. The worst hit were the most industrialized, including the United States, Germany, Britain, France, Canada, Australia, and Japan. Cities around the world were hit hard, especially those based on heavy industry. Construction virtually halted in the United States and other countries. Farmers and rural areas suffered as prices for crops fell by 40-60%. Mining and lumbering areas were perhaps the hardest hit because demand fell sharply and there was little alternative economic activity.\n\nPresident Herbert Hoover's Treasury Secretary Andrew Mellon advised Hoover that a shock treatment would be the best response: "Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. . . . [That] will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people" (Hoover Memoirs 3:9). Hoover rejected the advice, made Mellon an ambassador, and tried to keep wages high, farm prices high, and public works going to ameliorate the distress—but it only got worse.\n\nThe Stock Market Crash did not plunge all Americans into instant poverty. Indeed, about one third of the population was seriously hurt by 1932. The other two thirds (who were employed) suffered from reductions in job security, money income, and hours of work; due to reduced prices they gained in real wages and suffered in terms of debt. However the depth of the suffering was far more acute than the height of the benefits with extreme poverty and even serious malnutrition. Moreover even those that benefitted were unsure of their future; many had family who were hurt.\n\nEasy credit fueled the consumer driven economy of the 1920s, and following the depression, credit availability began to tighten, both for business and consumers. With lenders restricting their credit availability, and moving quickly to secure their liabilities, employers who were hurt by the ripple effect of Wall Street were the first to be liquidated. As employers closed their companies, the ranks of the unemployed grew, which further complicated the banking situation by reducing income from credit lines, which cascaded into a liquidity crisis leading up to the banking panic of 1933.\n\nConsumers who had taken advantage of credit sometimes were unable to meet the monthly payment and repossession of automobiles, furniture and household goods became common.\n\nForeclosures on home mortgages rose throughout the period, and affected people in all income brackets. In a few localities, the forced sale of personal property drew neighbors who attempted to disrupt the proceedings as a form of protest of the action and support of the family under the eviction notice. The angry crowds also had the effect of scaring off potential bidders for auction goods. While this allowed neighbors to pay pennies on the dollar for their neighbors' possessions (which were occasionally given back to the family following the sale), it also did little to reduce the debt of the family being evicted.\n\nThe wealthy, who had significant investments in Wall Street, did experience losses; however those losses depended on how investments were structured. As a result, all but the very well-off curtailed their spending habits. Some of the wealthiest families, like the Kennedys, were virtually unfazed by the Stock Market Crash, and were able to continue living their lives largely as they had before the Depression. Others, like the Hellers, used independent investments to "float" for several years after the Crash, most bottoming out by the mid-1930's. Many wealthy American families found their extensive finances wiped out ove
183543
At the worst point of the Great Depression, in 1933, one in four Americans who wanted to work was unable to find a job. Further, it was not until 1941, when World War II was underway, that the official unemployment rate finally fell below 10%.\n\nYou know you are right I scanned dozens of papers and they all reference the percentage and not the actual 12 million that I am guessing :-)
447387
Ever heard of The Great Depression? That was what happened when President Herbert Hoover did nothing when the stock markets went belly up and the banks all closed. Roosevelt enacted the FDIC to protect your money and strategically place cash reserves all over the country to avoid another depression.
136111
< The Great Depression was a massive global economic recession (or "depression") that ran from 1929 to 1941. It led to massive bank failures, high unemployment, as well as dramatic drops in GDP, industrial production, stock market share prices and virtually every other measure of economic growth. It bottomed out in 1933, but it would be well after World War II before such indicators as industrial production, share prices and global GDP could surpass their 1929 levels.
637259
Check this out http://canadianeconomy.gc.ca/english/economy/1939ww2.html
788958
It has to do with the way the economy works.  George Bush has given tax cuts to the rich.  He did this because he believes (as his father and Reagan did) that if the rich have more money, they will use it to create more businesses so that they can get richer; a theory known as "trickle-down economics."  The natural side effect of more business should have been more jobs, because you need people to run those businesses.  Makes sense on the surface.  And it worked to a point, there are more businesses and the ones already there have more money.\n\nWhat this theory doesn't take into account is how businesses operate.  Businesses by nature struggle to hold onto as much money as they can.  They hire as few employees as they can at as low a rate as they can to put together the cheapest materials they can get without risking a lawsuit into a product that the businesses force the employees to make as quickly as possible (to avoid overtime) that they will then charge as much as the possibly can at the market.  So very little money is trickling down into the middle and lower classes.  Added to that, the businesses are charging outrageous prices but on products we need, so we are also having to pay more even though wages have stagnated.\n\nThis creates a huge problem.  Those formerly of the middle class having had no wage increase but definitely having price increase have slipped more and more into the lower class.  That is why the rich/poor gap is getting wider.  The businesses have money, which is attracting the rich shareholders and so that bumps the Stock market way high; and yet the money isn't getting to the consumer and so the economy is still very sluggish, because the consumer (who is also the employee) has no money to put into the system.\n\nWhich will soon provide another problem.  Pretty soon now the middle class (which will essentially be a poor class) will no longer have the money no matter what they do and the products being bought will drop off.  This will damage the businesses, and the people will begin to starve or be without clothing or shelter.  It may even have the potential to create a new Great Depression, because the money will no longer be going through the system.  Incidentally, the first Great Depression (which occurred in the 1930's) started immediately after one of America's stock market hit very high in the 1920's.  This is a bad sign actually that the market went so high so quickly, if something isn't done soon we will be in that Depression again.\n\nWhat we need to do is get the money to the poor and middle classes.  They have to spend the money to clothe and feed themselves (something businesses don't have to do).  We do this by taxing the businesses with capital gains taxes and estate taxes, while dropping property taxes (which still help the rich, but help the middle class far more).  We need to raise the minimum wage so that more employees have more buying power.  And I know this is counterintuitive, but welfare helps.  Giving money to the poor ends with them using that money to give to businesses to get their food also, so it still gets back to businesses who can then use it to pay more employees.  No matter where you cut taxes, it always gets back to the companies; but if you give it to the rich it will only help the rich.  If you give to it to the poor, it helps everyone.\n\nImmigration strangely enough helps out as well.  Those immigrants don't use welfare (no matter what you are told) because they don't want to be on a government list that is checked often and could end in their deportation (which they avoid at all costs).  So they work because they have to.  They take that money and immediately put it into businesses so they can feed and clothe themselves, so it always goes back to creating more business which helps everyone.  But it does so by forcing the businesses to put money back into the system (which they wouldn't do on their own).  Bush is
503708
No. All wars have a root cause of economics and then you go from there. Money and emotions run the world.