CLASS 4

I’m back, so after 2 weeks of break we returned to classes and the topic of today lesson was economics! Not my favorite topic but I found the Great Depression quite interesting. There were different causes for the Wall Street Crash that led to the Great Depression I summarize them into 5:

·         Blind faith in the Bull Market driving up stock prices, the speculations of the price of the shares turned to be completely wrong causing the crashed of the stock market.

·         The president Hoover administration and the Smoot-Hawley Tariff that reduced imports and exports caused more damages in the economics and did not put an end to the depression.

·         The unequal distribution of wealth and income. In 1929, two hundred of the biggest corporations controlled 50% of the nation's corporate wealth so if just a few companies went under after the Crash, the whole economy would suffer.

·         Bad banking structure, the structure of these banks was bad so when the Crash happened most of these closed.

·         Lack of government regulation, the government did not intervene and when it intervened just made things worse.

Some consequences were:  Many businesses went bankrupt, Banks began to fail wiping out personal savings and further decreasing demand, the Government relief funds ran out and foreclosures increased along with homelessness, hunger, and crime.

Learning about the Great Depression make me understand that no matter how strong and how prepare the economics of a country is, with just committing an error it could all disappear within seconds.