The Us in Depression and War.
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3/14/19
Unit 4: The US in Depression and War
The Great Depression and the New Deal
1920s: Fordism, Mass Consumer Society, Nativism and Race Consciousness, Psychology and the Self
Middle Class becomes smaller during the 1920s until many are pushed in to being destitute
Causes:
-stock market crash in 1929
-prevalence of credit and installment buying- people bought things that they could not really afford, people began to spend over saving
-mechanization and industrialization of farming with wheat and cattle-grazing caused soil erosion and destroyed grassland
-banks were weak and did not have much to back them up when things went wrong- when bank runs occurred, they ran out of money and there were credit freezes leading to deflation
-deflation led businesses to cut costs and lay off workers which led to unemployment as well
When depression strikes, President Herbert Hoover does not believe it is a huge issue, but does do some things, sets Smoot Hawley Tariff Act which increases tariffs for Europe, Europe responds with trade war which means even less people buying US goods.
-Dust Bowl hits in the early 1930s
3/19/19
The New Deal
-Great Depression causes unemployment rates up to 25%, jobs had been source of dignity and independence- this takes a psychological and economic toll on population
-Hoover failed to adequately respond to the crisis as he believed individuals were responsible for their own hardship
-FDR wins 1932 election by a landslide
-quickly declares bank holiday to try and stop the bank run
-establishes FDIC to insure money in banks
-large numbers of programs