Image may be NSFW.
Clik here to view.
It’s time for a history lesson folks! Everyone seems to have their own opinions about The Great Depression of the 30’s; what started it and who is responsible for prolonging it. Everyone seems to agree it was a shitty time to be in the western world. On one side of the globe you’d freeze in a mile long line for food, on the other side, you’d go batshit counting millions of Deutsche marks to buy a loaf of bread and hearing Hitler shouting bullshit on every street corner. People got so pissed off in Germany, that they elected a psychopath racist in hope for a change. You’ll find a common theme in these historical articles: that desperation, pessimism and lack of trust go a long way to fuck up the world.
The Great Depression began on September 4th, but made its big debut on October 29th, 1929, known as the “Black Friday”. The stock market collapsed and made everyone panic. As discussed before, a huge domino effect began, that destroyed almost half, 46% to be exact of US industrial power. Then, like a huge, disgusting fart it spread into Europe and made a mess there. Germany and Austria were hit the hardest because US loans to rebuild stuff after World War 1 stopped. UK was also hit pretty hard, and had to fend of Socialists and Nazis all the way through to World War 2.
So what the fuck happened? What made half of people on this planet poor and desperate? What events led to the depression?
There are two theories as to the cause of the crisis; demand-driven theories which argue that over-consumption and under-production led to collapse, then there are monetarists who think Governments fucked up big time and made everything much worse. In my opinion it’s a mix of both.
A huge boom, called the roaring twenties, a time of low taxes, radio and automobile, and government funded infrastructure happened. It was a time of unprecedented prosperity, speculation, and deregulation. Like after a long 8 year binge, the aftereffects and the hangover were horrendous. With the rise of prosperity and income, regular people went into the stock market. Every factory and business seemed to be prospering and there weren’t any concerns about something going wrong. This fueled a massive speculative bubble, which overflowed the economy. Cars and radios were made only to be left in storage; factories were built only to be left abandoned. People wanted stocks, not real production, so the massive amounts of investments put into factories and young corporations were wasted on production that nobody bought.
That was the demand-driven side; the monetarist side of this is the deregulation part. When President Harding assumed office in 1921, there was 20% unemployment and huge inflation, mostly due to post World War 1 factors. So he signed some laws and tariffs, lowering taxes as much as possible and fended off any attempt at regulating of business. The low taxes and almost zero regulation led to a huge boom because people, mostly rich had a lot more money to invest and build stuff. Low taxes aren’t really the problem, it’s the deregulation.
Think of it as any game of sports, there are always judges and referees somewhere to regulate the fair game. When you get rid of them, players get to do whatever they please, so they play by their own, unfair rules. Monetarists think that applying this evolutionary; the strongest wins theory will lead to prosperous and good businesses around, and the weak ones dying off. What they don’t really think about are the regular people, the workers and the clerks who get fucked in the process. So yes, the US Government had a role in setting up the Depression and worsening it. The Federal Reserve didn’t do anything to stop the collapse of major banks during the recession.
Alright, the technical stuff is now away, let’s get down to brass tacks. Because businesses failed, banks collapsed and governments impoverished, unemployment rose to the highest levels in US history of employment, 24.9% to be exact. This, of course, made a lot of people poor and starving. Because they were poor and starving, they began sinking into the deep, deep hole that is pessimism. And of course, because almost everyone was hit, no one couldn’t start a factory or build a business to employ these people. The cycle of lack of trust and bad expectation continued until a man named Frank Roosevelt became President. He had some very strong words to share:
“Primarily this is because rulers of the exchange of mankind’s goods have failed through their own stubbornness and their own incompetence, have admitted their failure, and have abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men. True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence….The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit”
FDR signed the New Deal, a number of recovery programs made to help the working people. Huge amounts of borrowed money were pumped into the economy, revitalizing it to some extent. Roads were built for the sake of building roads and employing people, houses were built for the same premise. It was a huge boom in American infrastructure; most of the roads now were built during that time. But the Depression truly ended with the start of World War 2, now there was a true cause to build rifles and tanks and plains, to work in factories day and night. The crisis that started in America ended up working great lengths in making it the Power that it is right now.
The post The Great Great Depression appeared first on The Satiric.