1. Great Depression
Hoover to Roosevelt

2. Objectives
Cite and explain evidence that led to the transition of the U.S. economy from laissez- faire capitalism to an increasingly regulated economy.
Critique the government‘s use of tariffs and trade agreements.
Evaluate deficit spending as a means of financing government programs.

3. Should government provide a safety net for people when the economy fails them, and they cannot survive?

4. What if there was no safety net for people at all?...
Food Stamps
Social Security

5. What if there was no safety net for people at all?...

6. When the Stock Market crashed in 1929 and the Great Depression set in…many people had nobody to rely on but themselves. The government did not have any of the programs it has today (Food Stamps, Social Security, Welfare, Medicare, Medicaid). You only had yourself to look after you and your family.

7. Causes of the Great Depression
Easy Credit/Rising Personal debt
Speculation/Buying on Margin
Overproduction
Bank Runs

8. Causes of the Depression Video
Crash Video and Roosevelt Respone to the Bank Crisis

9. Easy Credit/ Rising personal debt
People got easy credit to buy a lot of stuff (cars, appliances). When the market goes bad, they can’t repay their debts

10. Speculation/ Buying on Margin
People took big gambles on Wall Street hoping to get rich quick
People made investments on borrowed money (buying on margin)

11. Overproduction Supply Demand/ Price
As supply goes up, demand goes down. This means prices fall.
This happened to farmers with their crops, it happened to the auto industry and industries that depended on it (steel, rubber, glass, etc.)
Supply
Demand/
Price

12. Bank Runs
Banks depend on people putting their money into them…they use that money to loan out and make money
When the market started to fall, people panicked and withdrew their money…banks go broke.
By 1933 – 11,000 of the 25,000 banks nationwide had collapsed

13. Clip from “It’s a Wonderful Life”
Bank Run Scene

14. Herbert Hoover did very little…
Great Depression stats
Hoover’s Response
25% unemployment (9% in 2010) – 6% Today
The US lost a total of $30 billion the week of the stock market crash
Hawley-Smoot Tariff Act
Reconstruction Finance Corporation

15. Reconstruction Finance Corporation Hawley Smoot Tariff Act
Hoover’s response
Reconstruction Finance Corporation
Hawley Smoot Tariff Act
Gave money to big businesses, railroads, insurance companies
Purpose: prosperity at the top would “trickle down” to the rest of the population
Puts a tariff in place
Taxes imported goods (stuff from foreign countries) so that foreign goods are more expensive. Encourages people to buy American products.

16. Reconstruction Finance and Hawley Smoot Tariff basically do nothing for people…
“Trickle-down
Theory” really
doesn’t work…

17. People blame Hoover for their problems…

18. Election of 1932… FDR promises a “New Deal”
Says he will support people directly through relief, recovery and reform