1. Gross Domestic Product
** In billions of dollars, a figure expressing how much the economy has produced.

2. Unemployment Rates, 1900’s 1928 – 4.2% 1933 – 25% 1920 – 5.2%
1930 – 8.7%
1932 – 23.6%
1933 – 25%
1934 – 21.7%
1936 – 17%
1938 – 19%
1940 – 14.6%
1942 – 4.7%
1944 – 1.2%
1946 – 3.9%
John Maynard Keynes – governments should “deficit spending, generating economic growth.”
Highest years of deficit spending during 1930’s – 1934 & 1939 – deficits of $2.9 billion.
At the height of government spending during WWII, the national deficit was at $54.5 billion in 1943.

3. So …
Massive deficit spending by the United States government, that is, spending more $$$ than what the government receives in taxes – or Keynesian economics – is what ended the high levels of unemployment associated with the Great Depression.
And …
This is generally what France, Great Britain, and Germany did to get out of the Great Depression

4. But what about … “How Did We Get Out of the Great Depression
But what about … “How Did We Get Out of the Great Depression? | Hillsdale College Econ 101”
An economist tries to explain what ended the Great Depression …
Pay attention to comments relating to …
Blowing up tanks in the Mohave Desert & troops in Central Park
“How the real world works”
WWII rationing comments

5. Consumption
Investment
Government Spending
C + I + G = GDP

6. But what about … “How Did We Get Out of the Great Depression
But what about … “How Did We Get Out of the Great Depression? | Hillsdale College Econ 101”
An economist tries to explain what ended the Great Depression …
Pay attention to comments relating to …
Blowing up tanks in the Mohave Desert & troops in Central Park
“How the real world works”
WWII rationing comments

7. Really?? ** Reduced unemployment and ended the Great Depression …
So this guy thinks …
Increased international
trade
Fewer government
regulations
Lower corporate and personal income tax rates
** Reduced unemployment and
ended the Great Depression …
Really??
Gary Wolfram

8. What he doesn’t discuss … unemployment during the Great Depression?
What did solve
unemployment during the Great Depression?
What did return consumer
confidence during the
Great Depression?
What actually did happen in
the “REAL WORLD?”
Gary Wolfram

9. Unemployment Rates, 1900’s According to Gary Wolfram … Did …
1920 – 5.2%
1928 – 4.2%
1930 – 8.7%
1932 – 23.6%
1933 – 25%
1934 – 21.7%
1936 – 17%
1938 – 19%
1940 – 14.6%
1942 – 4.7%
1944 – 1.2%
1946 – 3.9%
According to Gary Wolfram …
Increased international trade
Fewer government
regulations
Lower corporate and personal income tax rates
Did …

10. Legacy of the New Deal [1] On-Going Debate about
the Role of Government in Society
[2] The Safety Net
[3] Government Intervention into the
nation’s economy -
“Laissez-faire” Economics is Dead

11. New Deal Programs
- Funded by payroll contributions from all workers and tax contributions by employers - Supplemental retirement for those at 65 years of age (now eligible at ages 62, 65, and 68) - Unemployment insurance to those temporarily unemployed - Modest welfare payments to the needy, disabled, and poor mothers w/ dependent children

12. - Separates commercial & investment banks - FDIC – Federal Deposit Insurance Corporation is established, which guarantees banking deposits at the time up to $5,000.

13. 1st - Required companies to give complete information on all stock offerings (this refers to the price that the stock is worth)
- 2nd - It also created the (SEC) (1934) to regulate the stock market / prevent the spread of “insider information”

15. - In order to reduce the supply of agricultural goods thereby raising prices … (1) Livestock are killed off, (2) Certain targeted crops, especially dairy are destroyed, and (3) Farmers are paid to conserve land

16. - Employed men aged 18 to 25, later includes military veterans
- Employed men aged 18 to 25, later includes military veterans * Paid $30, have to send $25 home to family * Developing parks and trails * Building roads and water reservoirs * Developing campgrounds * Planted trees to prevent another Dust Bowl

17. - Largest public works program of the New Deal!!
* Constructed highways, roads, streets
* 125,000 public buildings
* Over 800 airports and
8,000 parks
* Employed actors,
writers, musicians, etc.

18. - Helped tenant farmers displaced by AAA
- Helped tenant farmers displaced by AAA * Spent $1 billion in aid to help tenant farmers work the land and buy their own land. * Most famous for photographs taken displaying the hardships of rural Americans during the Great Depression - Ron Stryker said, “I want to see the whites of their eyes.”

19. - Established “Codes of fair competition” between management, labor, labor unions, and government
** “Codes of fair competition” were later declared unconstitutional by the U.S. Supreme Court

20. Stabilized the banking industry calling for a four-day bank holiday, as federal government inspectors of the banks would issue a license to those banks allowed to remain open.

21. Other New Deal Topics … Franklin Roosevelt
- Franklin Roosevelt’s political philosophy …
- Roosevelt’s Optimism …
- Fireside Chats …

22. Gross Domestic Product
** In billions of dollars, a figure expressing how much the economy has produced.

23. Unemployment Rates, 1900’s 1936 – 17% 1938 – 19% 1940 – 14.6%
1930 – 8.7%
1932 – 23.6%
1933 – 25%
1934 – 21.7%
1936 – 17%
1938 – 19%
1940 – 14.6%
1942 – 4.7%
1944 – 1.2%
1946 – 3.9%

24. Problems with the Farms and Rural and Western Banks (fill in your guided notes)
[1] During WWI, prices are good
[2] Farmers invest
[3] Overproduction
[4] Crop prices drop in 1920 & 1921
[5] Hard time paying mortgages and loans
[6] Farms become foreclosed
[7] Rural banks fail

25. Great Migration (during WWI, 1914-18) …

26. What happens to “Tax Rates” in the “Roaring Twenties?”
“Supply Side Economics”

27. Politics of the 1920’s Warren G. Harding, 1921 - 1923
Corruption under President Harding
“Ohio Gang” – Daugherty, Forbes, etc.
“Teapot Dome” Scandal (1922)
Prohibition – 18th Amendment
Calvin Coolidge,
Teapot Dome Oilfield

28. 1920’s – An Era of Optimism
(1) Credit culture of America in the 1920’s
(2) “Buying on the Margin” – risky investments in stock market speculation
(3) Farmers over-invest, taking out loans for more land and farm equipment
(4) Overproduction in farm products and consumer goods

29. “Roaring Twenties” Not Just a Culture of Optimism … Scopes Trial
Rise of K.K.K. &
Nativism

30. Established a 2% quota max on immigrants from select areas of the world …
** Southeast Europe, Asia, Africa, based upon 1890 immigration statistics.

31. African American Political Organization
Booker T. Washington ( )
Favored a “gradual” approach to social justice, focusing first on job skills & economic development
W.E.B. DuBois ( )
Favored immediate social justice, full civil rights, and political participation immediately
Marcus Garvey
Back to Africa
Movement
“Atlanta Compromise”

32. Birthplace of Jazz Music …
Known for its style of …
African Americans, though they played in clubs, were not allowed as patrons
Duke Ellington
Louis Armstrong

33. Banking Crisis (2) Mid-1920’s Low interest rates by Federal Reserve
(1) Early 1920’s Expanding operations, taking out loans
(4) ,
Bank Runs
(5) Early 1930’s, Fed. Makes Mistakes, does nothing
(2) Mid-1920’s Low interest rates by Federal Reserve
(3) Late-1920’s Stock market speculation, as commercial banks invest depositors $$$
Credit Freeze
Banking Crisis

34. “The Great Crash” “Black Tuesday,” Oct. 29, 1929
Panic in Selling of stocks
Weakens Economy in Two Ways:
Banks invested in the stock market, lost $$$$
(2) Weakens credit …

35. The Great Depression Effects upon families … School closures …
(men, women, children)
School closures …
Rail car accidents …

36. Family Life in the Great Depression Fertility Rates (per 100,000 women aged 15-44)
- 1928: : : : : : : : 77.2
- 1936: : : : : : : : 94.3

37. Family Life in the Great Depression
Average divorce rate, (per 1,000 people)
: : : : : 2.5

38. Dust Bowl
- Causes of the storms
- Dust Bowl Refugees …

39. - Causes of Dust Pneumonia …
- “Underconsumption” in the 1920’s caused by …

40. Hoover Responds to the Great Depression
By 1933, unemployment is at 25% …
Bonus Army (1932) …
40,000 war veterans want their promised bonus
U.S. Army evicts veterans from Washington D.C.