The Current Recession Vs The Great Depression

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Status: Finished  |  Genre: Other  |  House: Booksie Classic
I wrote this at the beginning of my Sophomore year, I know it's kind of clear what my opinion is, which really wasn't my goal but I have a tendency to make my feelings known so...just tell me what you think!

Submitted: July 29, 2012

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Submitted: July 29, 2012

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Have you ever noticed how history seems to repeat itself? Have you ever heard someone say we study the past to prevent it from happening in the future? If you have then you’ve probably noticed that the first is true and that the latter is rare. An obvious example is these two events. Though the Recession is not as bad as the Great Depression it has some striking similarities, and few differences.  Some of the obvious similarities are deregulation, speculation and uneven distribution of wealth. Some less obvious differences are that most of our deregulation was with the CEOs and in the Great Depression it was banks, the speculation for the modern day Recession was unknowingly, whereas in the 30s it was intentional, and the uneven distribution of wealth was demonstrated in the 30s with the Trickle Down Theory and now it was it was the CEOs giving themselves bonuses.

Deregulation has always been a problem in our society. In the 30s President Hoover said; “America’s Business is Business.” His theory was that if he let the banks and businesses do whatever they wanted everyone would prosper. He was wrong. In allowing this to happen the banks made investments with their clients’ money based on stocks where there were people buying and selling stocks to cause inflation so they made money and everyone else didn’t. When the stock market failed the banks lost the money so when people came to get their money the bank didn’t have it. This caused mass poverty, because they didn’t have any money to buy food, or anything else. People were unable to pay rent and mortgage and lost their homes, causing millions of families to become homeless. In the modern day Recession deregulation happened again, with big businesses. The government didn’t monitor the big company CEOs. These CEOs belonged to companies like AIG and Goldman Sachs. Their greedy hands cost their company millions, and investors thousands. What prevent a second Great Depression was that the government bailed out these companies so investors didn’t lose as much. So even though the consequences were the same, they were on a much smaller scale.

You’d think that after the Great Depression the government would’ve made sure nothing like it ever happened again, that they wouldn’t have let things fall slack again, especially when it comes to speculation. You’d think that, but, unfortunately, you’d be wrong. Speculation was a main player in the Great Depression, as we know. We know that in the 1929 there were groups of people who got together and decided they were all going to buy a certain stock, to make other people think that it was a good investment. This is called inflation. They did this so they could sell the stock and make money. Basically, lying became the most prosperous business. In the 2000’s speculation happened too, a lot with Real Estate. Real Estate companies bought homes and sold them for more than they were worth, and unknowing consumers bought them with the hopes of selling them for more, because their agent told them that the market for homes would keep going up. What the home buyers didn’t know was that the homes in their area could be bought on subprime loans, and when they defaulted, their home values went down. In a panic, much like the stocks in the 30s, people started selling their homes which cost them thousands of dollars.

Society has basically always been a caste system, with the poor at the bottom, the middle class in the middle and the wealthy on top. Uneven distribution of wealth is a problem, not only in the United States but also around the world. Most modern day societies operate with something at least resembling a caste system. Speaking of the wealthy, President Hoover also supported the Trickle Down Theory which said that if the wealthy were allowed to be wealthy then everyone would benefit because then the wealthy would create more jobs. They didn’t. The wealthy realized that if they just bought machines to do their employees work then they wouldn’t have to pay anyone, and that would save them money, which helped cause unemployment which led to homelessness and poverty, meanwhile the government was raising taxes on those same middle class Americans who were losing their jobs. With the 2008 crash came some disturbing revelations to the citizens of the United States. We found out that big time CEOs, which was already well known as an ‘Old boys club’, were making bets against their own companies and causing them to fail to make more money, on top of giving themselves millions if not billions of dollars in bonuses while their employees lost their jobs.

There is a common denominator in all this, and that is greed. This just goes to show that money corrupts and the government should’ve realized this and put a stop to it, but they didn’t. They should’ve learned that things don’t just get better, and stay better on their own. They should know that just because we’re prosperous today doesn’t mean will be prosperous tomorrow. Though the American citizens should be our governments’ main priority they have to realize that if we suffer, so does everyone else. They have to realize that regulation of businesses and banks is a must, that the CEOs of big companies need to be watched, because clearly, they can’t be expected to be honorable on their own. Hands off does not work, it didn’t then and it won’t now, and it’s up to us to make that clear. We, as the citizens of the United States of America, the lifeblood of our country, have to look after each other, because we are all we have. And if we can’t depend on each other, who can we? Because no one else will pull us out of this hole.


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