Great Depression Vs Great Recession

The Great Depression and Great Recession had profound consequences in both the United States and around the world. Almost a century apart, these two economic downturns resulted in strong governmental action. Franklin D. Roosevelt initiated his New Deal program after the Great Depression, while Barack H. Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act after the Great Recession. Both presidents had hoped that the legislation passed during their respective terms in office would be enough to prevent the type of economic downturn that each president had just experienced. In this essay, I will first provide a summary of the Great Depression, including a brief analysis of some of the underlying causes for the crisis. Second,

From 1929 until 1933, prices and real output sharply declined. “Between the peak and the trough of the downturn, industrial production in the United States declined 47 percent and real GDP fell 30 percent. The wholesale price index declined 33 percent.” According to some estimates, the unemployment rate rose to approximately 25%. John Maynard Keynes said the following with regard to the economic downturn: “in the middle of the greatest economic catastrophe… of the modern world… there is a possibility that when this crisis is looked back upon by the economic historian of the future it will be seen to mark one of the major turning points.” Fundamentally, this crisis resulted primarily from a decline in spending. This ultimately “led to a decline in production as manufacturers and merchandisers noticed an unintended rise in inventories.” Five factors caused this historic economic

This law regulates the selling of securities, an area that states had sole jurisdiction up until the stock market crash of 1929. “The legislation addressed the need for better disclosure by requiring companies to register with the [SEC].” Unfortunately, this post-Depression-era creation has also proven to be a failure. Oversight flaws by the SEC fueled the Great Recession crisis; this fact was conceded by the former chairman of the SEC, Christopher Cox. Chariman Cox has been recorded as saying that the SEC was “fundamentally flawed from the beginning.” Among the flaws include failures to appropriately monitor entities that collapsed, such as Bear Stearns. Another major flaw included the SEC’s failure to stop Bernard Madoff’s “long-running investment fraud despite repeated