Impactof the Great Depression
Inthis reading, the authors examine the impact of the great depressionthat happened in after the 1929 stock crash in America. The authorsdiscuss the stat of the American economy during the economic crisisthat was sparked by the crash of the stock market. Through a wellpresented graph, the authors present the impact of the depression onthe Dow Jones industrial index that shows a decline of performance(Goldfield et al 124). Despite the previous high performance, thestock market crashed in one day dubbed the “Black Tuesday”(Goldfield et al 122). The main idea by the authors is that the crashof the stock market did not cause the great depression it onlymarked the beginning of the depression.
Theauthor is right in the argument about the relationship between thestock market crash of 1929 and the economic depression. I agree withthe authors’ assertion that the stock market was a result of thefactors that caused the great depression. Actually, the economiccrisis that followed after the stock crash was the real depression,the crash of the stock market was just a signal of the cause. I agreethat the cause of the depression was the weaknesses in the neweconomy that was marked with poor distribution of wealth. Unequaldistribution of income means that the wealthy earned highly while theindustrial workers earned lowly, leading to a reduction inproduction.
Thefocus of the authors on the impact of the depression on the economyis appropriate in support of the central argument that the crisis wasas a result of economic disparities in the country. I agree that mostAmerican industries were owned by the rich and dominated the marketsand controlled almost half of the economy. On the other hand,farmers’ earnings were low and almost half of the population livedbelow the subsistence levels. This is because the factories that wereestablished were shut down and the industrial production of thecountry went down (Rothbard27).
Inagreement with the author, the collapse of the industries led to thecrisis. And the collapse of the industries led to the stock marketcrash, which was the beginning of the depression. At the same time,unemployment increased due to the loss of jobs as the industries werecollapsing, and incomes reduced drastically. As a result of theconsistent decline of the economic variables, the depression formed avicious cycle that fed itself. I also agree with the authors, thatthe efforts by the two presidents Hoover and Roosevelt only tried tosolve the problem but did not end the crisis.
Thisis because the stock market crash was just one of the impacts of theeconomic depression. At the same time, the authors present otherindustries and economic units that were affected by the depression.According to Goldfield et al (124), farming, households and thegovernment were equally affected. This way, the authors show that theeconomic crisis was wide spread, and not just at the stock market.
Inagreement with the authors, the stock crash did not cause theeconomic depression it was just the beginning of the economiccrisis. The description of the great depression shows thesignificance of economic policies to the social and political aspectsof life. The authors effectively describe the great depression as amacroeconomic problem that affected the entire economy and not justthe stock market.
Goldfield,D., et al, (2013). TheGreat Depression, A Nation In Crisis.In Smith,Lorraine and Bottcher,Elizabeth. LongmanAcademic Reading Series 5 Student Book,Volume 5. P122-124. New York: Pearson Education, Limited, 2013, Print
Rothbard, Murray.America`sGreat Depression.  Ludwigvon Mises Institute, 2000, Print