Economic Theories of The Great Depression
1929-1939
"As the night comes to an end, dawn approaches. Therefore, we must wear light armor and cast off the deeds of darkness."

Unlike the standard view among economists, this abstract critique examines how the United States is represented in the context of the Great Depression. It proposes that textbooks should focus more on monetary policy and the decrease in total demand, respectively. The Great Depression led to widespread human distress. The world's output and living standards experienced a rapid decline, affecting up to one-fourth of the labor force in industrialized countries. President Franklin D. Roosevelt conceived the New Deal, a comprehensive economic and social strategy that addressed all facets of society and the economy in response to a severe crisis. This initiative enacted numerous laws, decrees, and changes, fostering increased national collaboration. The Roosevelt administration sought to influence Europe's economy following World War II by distributing revenue through state taxation, social policy, and corporate support. It achieved its objective by optimizing the financial and industrial sectors through efficient reorganization. President Roosevelt's address to the citizens about the status of the United States, its current circumstances, and the government's upcoming initiatives served as a significant catalyst for implementing reform strategies. In his speeches, he tried to inform Americans of the precarious state of the economy and trade. Numerous bank and business failures forced citizens to endure financial losses. By prohibiting commercial banks from providing guarantees for investment loans and securities transactions, the government sought to establish a clear separation between investment and commercial banking. Radio was another tool the president used to keep the people informed about federal developments.
The president and Congress began enacting additional regulations to ensure the safety of Americans under the new pact. The first step was passing a statute that guaranteed jobs for most men. Consequently, the civilian corps safeguarded natural resources without involving the military. A significant advantage of these public works projects was infrastructure construction through volunteer efforts. The new initiative greatly benefited from improvements in the agricultural sector, which in turn assisted farmers. President Roosevelt established the Tennessee Valley Authority to address time-sensitive matters. This innovative organization tackled flood management, supplied electricity to homes and industries, and engaged in tree-planting initiatives that positively impacted the valley. The act also required enhancements in transportation and the facilitation of commerce and agriculture along the Tennessee River. The agency's creation was the initial attempt to address the wide-ranging development requirements of a large area. The expansion of the electricity grid precipitated the region's most advantageous developments simultaneously. Modern technology and electric lights have facilitated the production of additional products and increased efficiency among farmers. Despite requiring a substantial financial investment, the president's firm decision to achieve full electrification led to increased employment opportunities and a reduction in the region's unemployment rate. Amid the crisis, the government assisted those who had lost funds by half a billion dollars due to the banking shift. The authority to sell beer contributed to the stimulation of development and the creation of jobs. The Wagner Act regulated trade union operations, promoted trade organization development, and protected worker rights, ultimately assisting the state in emerging from a protracted crisis.
During World War II, the United States government implemented a protection policy to prevent territorial acquisition, sustain the capitalist system, promote collective action, and expand the industrial sector. Through unity, eliminating discrimination, and providing free education and home loans to veterans, the state experienced economic growth despite the expenditures made for hostilities. Roosevelt's policy led to the development of the Marshall Plan for Europe's rehabilitation and stimulated the growth of capitalism in the United States. Following World War II, capitalism aimed to establish dynamic adjustments that would balance the production and consumption of commodities. It also aimed to attract investment and cultivate specific industries. Consequently, it was imperative to identify the economy's most profitable sectors to achieve effective development. To accomplish this, evaluating the most well-funded industries and societal demand within the market is essential. Consumer demands influenced the development of cooperatives, which subsequently began competing with supermarkets. Mass-produced goods and natural product stores compete for consumers. Furthermore, the emergence of new economic methods has not undermined the core principles of capitalism. The question of an effective form for protecting workers' rights and ensuring economic profit arose once again. The government provided food to specific regions and financed education and medicine programs for the indigent until the 1960s. The government established cooperatives to uphold laborers' rights and encourage the production of environmentally friendly products. Nevertheless, inflation and declining profits were the catalysts for the decline of Keynesian management. The government provided food stamps to specific regions and financed education and medicine programs for the indigent until the 1960s. Government established cooperatives to uphold laborers' rights and encourage the production of environmentally friendly products. However, inflation and declining profits served as the catalysts for the decline of Keynesian management.
Economists and historians have different interpretations of the Great Depression. Economists focus on the role of the Federal Reserve, while college courses examine topics such as inequality, stock market crashes, and insufficient spending. The subject matter encompasses various disciplines. The Great Depression was not merely another disaster; it exposed the deep structural inequalities in American society. Most taxpayers in the United States became increasingly aware that any economic policy could fail, and they recognized the necessity of government intervention to steer the economy. The public demanded assistance in response to the declining economic output brought about by the Great Depression, which ultimately led to governmental action through what is commonly known as the New Deal. During the New Deal, the government initiated various intervention projects, positioning itself as a key player in the nation's economy. Additionally, the New Deal may have contributed to the growth of socialism and free enterprise while simultaneously imposing checks on capitalism. Over time, the federal government has expanded its involvement in social security, welfare, electricity generation, and securities regulation. Furthermore, the size of the government increased (Hall & Ferguson 3). The Democrats supplanted the Republicans as the public lost faith in the government. The establishment of welfare associations and unions to address unemployment led to the enactment of new laws that enhanced the government's power and established a welfare state within the country.


Reference
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Berkin, Carol, Christopher L. Miller, Robert W. Cherny, and James L. Gormly. “Making America:” A History of the United States (7th edition). 2015. Cengage Learning.
Brinkley, Alan. “The Unfinished Nation: A Concise History of the American People (volume 2, 8th edition).” 2016 McGraw-Hill Education.
Giedeman, Daniel C., and Aaron Lowen. “The Use of Economic History in Introductory Textbooks.” 2008. Journal of Economics and Economic Education Research 9: 47-66.
Mishkin, Frederic S. “The Household Balance Sheet and the Great Depression.” The Journal of Economic History 38: 1978. 918-937.
Roark, James L., Michael P. Johnson, Patricia Cline Cohen, Sarah Stage, and Susan M. Hartmann. “The American Promise: A History of the United States (volume 2, 7th edition).” 2017. Bedford/St. Martin’s.
Sauelson, Paul A., and William D. Nordhaus. “Economics (19th edition). McGraw-Hill.” 2017.
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