The Great Depression & The Great Recession

THEN: Stock Market Crash October 29, 1929 Investors ruined and banks closed: businesses can’t grow businesses forced to cut back on production, lower wages or layoff workers

WHY?: Margin Buying/Speculation Paying a small part of a stock’s price as a down payment and borrowed the rest. When the prices went up, one would sell the stock, pay off the loan, and keep the profit System worked as long as stock prices kept rising!!

NOW: The Housing Crash/Speculation

THEN: Unequal Distribution of Wealth By 1929 the top 10% of the nation's population received 40% of the nation's disposable income Salaries so low, people couldn’t buy what they wanted/needed Farm income declined 66% from 1920 to 1929

NOW: Occupy Wall Street

In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers)

NOW: Occupy Wall Street

THEN: Unemployment

NOW: Unemployment

April Unemployed workers wait to file claims outside a state office in Los Angeles, Calif.

THEN: Bank Failures Banks in the 1920’s loan too much $$ to investors Market crashers. Banks not paid back from investors so they can not give the depositors their cash. RESULT: BANKS WERE FORCED TO CLOSE!!!! PEOPLE LOST ALL THEIR SAVINGS!!!

NOW: Bank Failures

THEN: Installment Buying Allow people to purchase on credit, and people piled up debts. They used their money to buy on margin, hoping that prices would rise and they would make a profit When people cant pay back debt, it results in a cutback in spending….which leads to?????? Inflation: By % of American families earn less than $2500/year(minimum needed to live decently) However- top 0.1% had a combined wealth of the bottom 42%

NOW: Credit Debt