OPPapers.com

Second Great Depression

Second Great Depression

Tina Stringham

History 2020

Linda Wilke-Heil

November 10, 2008

There seems to be a lot of speculation lately on whether we are in a second Great Depression. It is good that people are thinking about this, because back in 1929, there was no talk and people were taken by surprise when it did happen. On the other hand, People are jumping to conclusions without taking in all the facts. We are not in a second Great depression because many steps have been taken by the people and the government to prevent it. The Stock market, the banks and the oil industry are the three main reasons why we are not in a second Great Depression. Elizabeth MacDonald’s article “We Are Not Headed for a Great Depression”, Robert J. Smauelson’s article “Is this a second Great Depression?” and Kimberly Amadeo’s article “Is the U.S. Headed Towards the Second Great Depression?” provides plenty of evidence to show we are not in a second Great Depression.
Today, stock prices have declined but have not declined more than 30% in one day (Amadeo, pg1). In 1929, the stock market lost most of its value from its peak during the Great Depression. Currently looking from March 2000 to October 2002, the market has only lost about 50%. This has happened 3 times since 1937 (Amadeo, Pg3). Since the late 1940’s, the United States has experienced 10 recessions (Samuelson, pg 1). This goes to show, that America has many ups and downs and just because you are in a “down” time, does not mean you are in a depression, but are in a recession.
The banking industry involves many different areas. We look at housing prices and foreclosures, business credit and bank/monetary difficulties. Housing prices have dropped over the last year decreasing the price of single family homes approximately 8% (Amadeo, pg1). Part of this is because of the panic being created. This is causing banks to tighten their credit which leads to lower real estate sales....