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The Great Depression

The Great Depression in the United States was marked by a dramatic stock market crash, high unemployment, and low industrial output and corporate profits.

Expanded Definition

A common misconception is that the Great Depression was caused by the Stock Market Crash of 1929. The true culprit, according to both historians and economists, was the string of bank failures in 1930, which ultimately gave birth to the Federal Deposit Insurance Corporation in 1933. Although the Federal Reserve Board already existed and was authorized to respond, the Fed Chairman at the time failed to act. The collapse of money supply after the shock of the stock market crash was the main cause of most difficulties. However, Congress also enacted strict tariff laws, the Smoot-Hawley Tariff Act, which had the effect of setting off a global tariff war effectively shutting down international trade.

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Anatomy of a Disaster - Part 1 compares the economic landscape leading into the Great Depression with the factors leading into 2008, with emphasis on income inequality and poverty levels.

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