CGS SS 102 Lecture Notes - Lecture 14: The Dust Bowl (Film), Invisible Hand, Wall Street Crash Of 1929
6 Apr 2016
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Hundred of banks had failed took people"s life savings with them. Official unemployment rate 23% (1932: married women not counted as unemployed (even if supported family, those who gave up looking for a job were not counted, those working part-time weren"t counted either. Homerville communities were shacks with homeless people. Speculation = the purchase of commodities based on their expected resale value along. Adam smith said rational behavior makes invisible hand work: speculators are not an economic man (assume market will go up forever) People bought stocks on margin borrowed money to make money. The great crash, october 1929: economy not fundamentally sound. Consequences of the great crash: cash flow interrupted. People buying fancy things no longer have money, revenue/rent not collected (customers lost) All money invested in stock market no long exists: the cascade failure of american banking. When collapse, took savings of those who used the banks. Stuck with houses b/c people couldn"t make mortgage payments.
