The United States of America suffered great economic recessions like the bank panic and depression in the 1820s. Again, there were the hard economic times that came in late 1830. The most significant economic illness that was so dark and so long came in 1930. It is what is commonly referred to as the Great Depression (Eichengreen and Barry 200). The adverse economic problem varied across many nations, having started as early as 1929 in most of the nations. It had its roots in the US after a significant fall in the stock prices that began in the last quarter of 1929. Between the year 1929 and 1932, the world's Gross Domestic Product shrank by fifteen percent. It was a bigger reduction as compared to the less than one percent reduction between the years 2008 and 2009. The paper will take a balanced overview of the impact of the Great Depression, the role of unemployment, veterans, blacks and a comparison of new deals of success between the US and Germany.
There is a postulation on two theories on the causes of the economic depression. These are the Keynesian theory and the monetarist explanation. The Keynesian theory explains that the significant drop in confidence led to consumption of goods and services and consequently, investments. The monetarist analysis affirms that the Great Depression started as an ordinary recession. It is the shrinkage of the money flowing in the economy that propelled the economic situation.
The economic turmoil had far-reaching consequences for both poor and the rich. There was decreased personal income, fewer profits, and a collapse in most of the manufacturing industries. It leads to massive unemployment particularly in the United States of America and most of the European countries. Statistical research data point out that the rate of unemployment in the US rose to twenty-five percent while it hit thirty-three percent in some other countries. The veterans and the blacks were also hit hard at the time of the depression. Most of them were the laborers in most of the heavy industries. For those that never had the opportunity to provide skilled labor force in the heavy industries, they opted to farm in the rural areas. At the beginning of 1930, Construction was virtually halted in many countries, and the farming Black suffered a major drop in the prices of crops by around sixty percent. With the few different jobs available, the industries under the primary sector like mining suffered a great deal.
The women maintained their role as housewives. Due to the reduced family revenues and reduced income generating jobs, the women had an uphill task of meeting health care services, food and clothing to their children. It is fairly easy to understand that the birthrates had to reduce because of financial reasons. Few women had the opportunity to secure white-collar jobs in industries. But there came a directive that a family had to obtain one job such that if the husband was working, the woman had to leave the job if she was also employed. In the rural areas, women expanded their vegetable gardens so as to increase the production of food crops and also to increase the sales so as to help maintain the generated revenues.
Different countries had their way of coming out of the economic recession. A comparison will be made between Germany and the United States. After his inauguration in 1933, President Roosevelt argued that restructuring of the economy would be necessary to prevent another depression and bring to a stop the current one (Barber 602). The Emergency Banking Act was signed into law. It ensured that there was a reopening of sound financial institutions under the supervision of the Treasury. On the other hand, the Agricultural Adjustment Act provided incentives to cut the costs of farming so that the regular farmers would get reasonable profits. The National Recovery Administration forced private businesses to work with the central governments. Their role was to create price codes so as to avoid monopoly and stiff competition among entrepreneurs.
Germany on the other had had strategic moves to come out of the turmoil because it seemed hit most by the Great Depression. The Weimar Republic was hit hard as most of the American loans to reconstruct Germany after World War one now stopped. When Adolf Hitler rose to power, he strictly followed an autarky economic policy. He created a network of economic allies in central Europe and the Latin America. He took control of the Labor Unions and the Public Works spending. With a significant amount of expenditure in the military, he helped recover the economy. In summary, the Great Depression had devastating consequences for many economies. Only the countries with strategic plans could swiftly move out of the turmoil.
Work Cited
Eichengreen, Barry, and Peter Temin. "The gold standard and the great depression." Contemporary European History 9.02 (2000): 183-207.
Barber, William J. Designs within disorder: Franklin D. Roosevelt, the economists, and the shaping of American economic policy, 1933-1945. Cambridge University Press, 2006.
