The beginning and end of the U.S. economic crisis from 1929 to 1933
Background: With the outbreak of World War I, the United States was on the brink of the battlefield, taking off economically with the help of the arms trade, and leapt to become the center of the world economy. The trade stimulus brought by World War I, the stable political and economic pattern after the war, the industrial revolution dividend driving domestic technological innovation, and the government's liberal policies in the economic field are superimposed, so that the US economy is like a pig on the cusp to promote the rapid development of the US economy. However, the government's Buddhist attitude towards enterprises is a double-edged sword, and the attitude of allowing the market to regulate the economy on its own has led to the development of the market economy on the verge of being out of control. The survival of the fittest, the universal law of survival of the fittest in the market economy in the performance of the most vivid, small companies one after another fell, strong enterprises through continuous mergers and acquisitions to become bigger and bigger, and gradually formed a market monopoly. Monopoly brings about an extreme imbalance in economic development, most of the resources are occupied by a small number of people, and the gap between the rich and the poor is getting wider and wider. The essence of capital is to continue to expand, so the production machine of capital is not allowed to be stopped. Capitalists are desperate to expand and engage in production. But the problem is that a small number of people occupy a lot of wealth, production increases, the poor can't afford to buy, the rich buy enough, and the liquidity in the market is getting less and less, resulting in a backlog of commodities. How to solve the problem of liquidity reduction? The banks thought of good ways to do it, and the loans were released, and the capitalists were happy, and the poor were happy. Enterprises continue to expand production, more and more money in the market, further accelerate the development of manufacturing and real estate industry, but the problem is that people who borrow money are already poor, loans to buy cars and houses, how to repay it? No one has thought about this, spend money for a while, and pay for the crematorium. Enterprises in this irrational environment to accelerate the expansion, the stock market is rising without a downward trend, more and more people borrow money to speculate in stocks, after all, no one thinks that the stock market will lose, and the sale of stable profit is a good deal. This is the Coolidge boom in American history. Finally, smart people became suspicious of this irrational expansion, sold their stocks, more and more people realized the seriousness of the problem, the stock market plummeted like dominoes, and the money lent out by the banks went bankrupt. Originally overcapacity, the poor are poorer, the extra production capacity is no longer digested, enterprises have collapsed, workers have industries, more and more unemployed people, more and more poor people, the capacity of enterprises to digest the people has become less, vicious circle, economic crisis completely broke out! The Great Depression in the United States.
Impact: The economic crisis has had a huge impact on the international community in a global context. First, the scope is wide, from the United States to Europe and even the world, covering the financial industry, industry and agriculture. The second is that it lasted for a long time, breaking out for four years and affecting American society for ten years. Third, the destructive force is great, and the industry and economy are declining.
Solution: The hapless President Hoover said" "I am a Buddha", and the original Hoover also agreed with economic liberalism, leaving the crisis alone and allowing it to develop on its own. Seeing that his support rate was getting lower and lower, he finally couldn't sit still and decided to intervene in the market. First, the bank can not fall, the bank fell, how to lend, how to develop the enterprise? Second, wages can not be reduced, workers have no money, products have been piled up, and then reduce wages, who will digest these capacity? The idea is very good, the problem is, the company has no money, the company said, my products can not be sold, still keep the workers why? Unemployment soared further. Third, raise tariffs to prevent foreign goods from seizing the domestic market. Europe"? So Europe imposed equal sanctions on the United States, and a tariff war broke out. Trump said, "Thank you Grandmaster, I learned." As a result, the US economy has not improved in the slightest! Hoover stepped down tragically.
Savior: Roosevelt came to power and Keynesianism rose. Measure 1: Rectify the economy, unlike Hoover, Roosevelt abolished the gold standard, because the dollar was originally pegged to gold, so it can not print the dollar indiscriminately, now canceled, I print casually, so the dollar on the market has become more, resulting in the depreciation of the dollar, American goods have become cheaper, and seconds have become sought-after goods. Measure 2: Adjust industry, limit the disorderly development of enterprises, and stipulate the minimum wage and maximum working hours. Measure 3: Adjust agriculture, stabilize the supply of agricultural products, and stabilize prices. Measure 4: Work-for-charity, that is, infrastructure construction, not only increases production capacity, but also creates employment. (The nature of the means is similar to socialism)
Subsequently, the ECONOMIC CRISIS IN THE UNITED STATES GRADUALLY EASED. Many people say that thanks to Roosevelt's New Deal, the United States came out of the economic crisis. In fact, it was The second world war that brought the United States out of the economic crisis at an accelerated pace.