The Great Depression was the period that affected every corner of the civilized world, from rich to poor, especially the United States. It started from the stock market crash in 1929 and lasted for ten years. It was the worst economic recession in industrialized American history regarding the crisis’s duration, spread, and depth. The Great Depression caused global unemployment and the falling of companies, and almost half of America’s banks ceased to exist.
Benjamin Roth was born in 1894 in New York, where his father Samuel settled in 1877. Then, in 1900 their family moved to Ohio state’s Youngstown. They had three children: Connie was born in 1920, Bob in 1925, and Daniel in 1929, when the Great Depression started. Benjamin met his future wife Marion in law school and was sworn into the American army right after graduation. After the war, Benjamin and Marion got married, and he became a lawyer and opened his office. Daniel Roth, that was interviewed, did not contribute to the family income because of his age during that crisis. His knowledge about the Great Depression was built on his father’s diary about financial issues and details.
Their family was strongly affected by this crisis, as everyone else. They did not have enough money to afford a car, and Benjamin rode a bus even in his eighties. College for their children was also questionable, but they managed to ensure quality education for them. Daniel and his brother Bob had served in multiple wars, including World War I. Unfortunately, their family lost Bob in the middle of the Korean War. He did not support United States efforts in Vietnam War because of his brother’s death. Daniel remembers being silent in his point of view, despite his disagreement with the government’s foreign policy.
However, the Roth family is not the proper example of this period, and even though the crisis affected them, they still were able to provide education for their children. The Great Depression caused poverty and hopelessness for many people around America. People could not afford food and had nothing to wear. Everything became even worse when fundamentalists started telling people that this crisis happened because of their sins, not the system, and many believed. In the darkest times of the situation, around fifteen million American residents did not have a job, and the number rose to twenty-five percent of the whole country’s population at the time in 1933 (History). However, because the world was already globalized, this crisis was felt all around the globe.
Everything started with the popularity of the stock market among Americans. People did not only invest using their money but began to take out loans in the banks to do it even more. Furthermore, even banks have started to buy stocks using money from customers’ bank accounts. Stocks were rising so fast that companies couldn’t justify their stock prices in time. People already bought everything they needed, so companies that got rich started slowing their production because of low demand for their products. As a result, the stock market crashed, people who borrowed money to buy stocks broke, and many Americans lost their life savings. Unfortunately, the Great Depression led humanity to Hitler, who used the crisis to come to power and started World War II right after the previous societal trouble ended.
The COVID-19 recession is often compared with the Great Depression of the 1930s. Many experts state “that the economic contraction of 2020 is possibly the deepest since the Great Depression” (Wheelock 1). The Great Depression recession lasted for several years, while the disaster caused by the coronavirus pandemic is slowly coming back to normal. The Commerce Department claims that “gross domestic product fell at annual rates of five percent in the first quarter of 2020 and almost thirty-three percent in the second quarter” (Wheelock 1). The coronavirus crisis happened faster and turned out to be one of the shortest recessions in the history of the United States of America.
The world has already adjusted to the pandemic, but nobody knows if COVID-19 will affect the economy again, causing another massive lockdown or lethal strain. However, the unemployment rate reached fifteen percent at its peak in April 2020 instead of twenty-five in 1933 (Wheelock 2). These two crises look similar but are entirely different. The difference was in the levels of wealth, prices, employment, and economic activity and what people had left after Black Thursday and Tuesday. The economy not only could not return to previous numbers for years, but it reached the bottom after four years.
To conclude, the Great Depression was a historical moment of understanding the consequences of uncontrolled banks and economic situations. Even though it was the worst economic recession in the history of the industrialized world, it ended up becoming a perfect example of how it should not be done. Humanity needs to save this information and try to prevent similar mistakes in the future as hard as possible.
Works Cited
History. “Great Depression History”. History, 2022.
Wheelock, David. “Comparing the COVID-19 Recession with the Great Depression”. Economic Synopses, no. 39, 2021, pp. 1-4.