chapter 23.1 a prosperous nation. review: describe the economy of the 1920’s. query: what did...
TRANSCRIPT
Chapter 23.1A Prosperous Nation
A Prosperous Nation
• Review: Describe the economy of the 1920’s.
• Query: What did Americans assume about the economy?
Hoover – A Symbol of America!
• Symbol of success•Rugged
Individualism• Economic
Darwinism?
Stock Market Boom• Stock = shares in
corp.• Company profit =
dividend• 1921 – 1929 =
bull market• Impact• Bestseller
Query
•Would you play the stock market today?
Stock Market Growth
How It Works• Dow Jones IA–
average stock price of major industries
• Buy stock = –Price–Dow
• Sell stock – –Price–Dow
Buying on Margin
• Pay a little up front…• … and borrow the
rest• Stock goes up• Stock goes down• 1921 – 1929
Reality
Danger Signs
1. Unequal distribution of wealth
2. Speculation
3. Personal Debt
4. Overproduction
Query
•Did any of the danger signs exist in the Great Recession?
Chapter 23.2
The Great Crash
Economic Cycle
Expansion
Peak
Contraction
Trough
Economic Cycle – Over Time
Countdown…
September 1929Black Thursday
(10/24/29)Government
ResponseBank Response
The Great Crash• Market falls…again
• Black Tuesday (10/29) =
• Massive selling off
• Prices fall steeply
• Loss = $14 billion
• Weeks to Months
• Overall = $40 billion
Black Thursday
The Great Crash
Black TuesdayBanks Buy Stock
Great Crash - 1929
Great Crash – 1987
Negative Business Cycle
No money to invest
Businesses Lose Money
People Lose Jobs
No money to spend
Buy fewer products
International Problems
•WWI Loans•Hawley Smoot Tariff •Stagnation!
Bank Problems
Impact
• Social Impact
Marches • Public Demands• Republican
Response• Bonus March• Hoover
Response• Public Response
• B
Too Little, Too LateMid-term woesResponse:1. Public Works2. Reconstruction Finance Corp.3. Federal Home Loan Bank ActBut NO HANDOUTS!
And Along Comes FDR
• Happy Days Are Here Again!• Roosevelt
campaign song• New Ideas…• Provides hope