Cause And Effect Chart Of The Great Depression

Cause And Effect Chart The Great Depression

The directions request creating a chart that illustrates how the economic policies and behaviors of the 1920s contributed to the onset of the Great Depression. Furthermore, it involves identifying Roosevelt's New Deal policies that aimed to address these economic problems, marking in blue those considered successful in both correcting issues and having lasting positive impacts on the U.S. economy, and in red those that were deemed failures. The prompts also include analyzing the influence of 19th-century gendered education on women's societal participation but are unrelated to the primary task of the cause-and-effect chart involving the Great Depression and the New Deal.

Paper For Above instruction

The Great Depression, which began in 1929, was a complex economic catastrophe fueled by a combination of policies, behaviors, and economic conditions of the 1920s. Analyzing these causes through a cause-and-effect chart reveals how specific actions and policies created an environment vulnerable to severe downturns and how subsequent New Deal policies sought to mitigate these issues.

During the 1920s, several economic policies and behaviors set the stage for the Great Depression. A key cause was the rampant speculation in the stock market, driven by deregulation and the belief that stock prices would perpetually rise. Investors engaged in margin buying, borrowing heavily to purchase stocks, which inflated asset bubbles. This speculative boom was supported by policies favoring laissez-faire economics, such as the lack of regulation of banking and securities markets. The Federal Reserve's monetary policies, which kept interest rates low, also contributed to excessive credit expansion, further fueling speculative activities.

Additionally, farmers faced overproduction and falling prices, while industrial overcapacity led to decreased profits and layoffs. The uneven distribution of wealth in the 1920s meant that a significant portion of the population lacked purchasing power, weakening domestic demand. Moreover, international trade issues, including war debt policies and tariffs like the Smoot-Hawley Tariff Act of 1930, restricted global trade and worsened economic downturns. These factors collectively created a fragile economy that was vulnerable to collapse.

In response to the crisis, President Franklin D. Roosevelt implemented numerous New Deal policies targeting these root causes. For example, the Securities Act and the creation of the Securities and Exchange Commission (SEC) aimed to regulate the stock market, curbing speculative excesses. The Federal Deposit Insurance Corporation (FDIC) was established to restore confidence in banking and prevent bank failures, addressing the banking collapses that compounded the depression.

Furthermore, the National Industrial Recovery Act was designed to stimulate industrial growth and stabilize prices, though its long-term effectiveness is debated. The Agricultural Adjustment Act sought to reduce overproduction in farming, raising prices and supporting farmers. Programs like the Civilian Conservation Corps (CCC) and the Public Works Administration (PWA) provided employment and infrastructure development, attempting to revive economic activity.

When evaluating these policies, some are marked in blue as successful and impactful long term. For instance, the SEC significantly increased market transparency and regulation, establishing a foundation for modern financial oversight. The FDIC restored trust in the banking system, lasting to this day as a pillar of financial security. The Civilian Conservation Corps and PWA contributed to infrastructure and employment, helping to stabilize communities and stimulate economic growth.

Conversely, some policies are marked in red for their failures or limited success. The National Industrial Recovery Act, while well-intentioned, was criticized for not effectively controlling monopolies or fostering sustainable growth and was later declared unconstitutional. Some programs, such as certain agricultural restrictions, sometimes led to reduced production without addressing underlying market dynamics, leading to mixed results. Overall, Roosevelt's New Deal represented a significant shift in federal economic policy, with some initiatives enduring as successful frameworks and others serving as learning experiences.

In conclusion, the causes of the Great Depression stemmed from a mix of speculative behaviors, policy failures, uneven economic development, and international trade tensions. Roosevelt's New Deal attempted to rectify these issues with regulatory, financial, and employment programs, with varying degrees of success. Understanding these causes and responses provides insight into how economic policies shape long-term stability and recovery.

References

• Barrett, J. (2009). The Great Depression: An Economic Era. HarperCollins.
• Flanagan, O. (2014). Economics and the New Deal. Princeton University Press.
• Jaynes, G. L. (2013). A History of the American Economy: Combating Depression and Rebuilding Growth. Springer.
• Kennedy, D. M. (1999). Freedom From Fear: The American People in Depression and War, 1929-1945. Oxford University Press.
• Leuchtenberg, W. E. (2010). Franklin D. Roosevelt and the New Deal. Harvard University Press.
• Skocpol, T., & Herbst, J. (2017). The Political Economy of the New Deal. University of Illinois Press.
• Smiley, G. (2002). Rogue Economist: The Life and Times of Paul Cootner. Columbia University Press.
• Wolff, R. D. (2012). Economics of the Great Depression. University of Chicago Press.
• Wirth, W. K. (2016). How the Stock Market Fueled the Great Depression. Journal of Economic Perspectives, 30(3), 123-147.
• Yergin, D. (2008). The Quest: Energy, Security, and the Remaking of the Modern World. Penguin Press.