Great Depression Usa

Final Paper – Topic 1

In the United States history, there were two big economic recession. The first one was the Great Depression, which occurred from 1929 to 1939. This was the darkest moment of the United States financial market history. The result of this was the Gross Domestic Product of U.S declined from $103.6 billion in 1929 to $56.4 billion in 1933 (shmoop.com). The second one was the economic depression which occurred in 2007. "The BEA final report revised its U.S. GDP growth rate for Q4 2008 to a negative 6.3%, worse than the 6.1% drop it reported in its preliminary report last month. This is the worst slowdown since Q1 1982, when GDP fell 6.4%" (Amadeo). There are a lot of commentaries had addressed the similarities between these two recessions. The comparison between the Great Depression and the current recession had extended from the fails of financial market to the labor market. But there is a very clear difference between these two recessions: the labor movements. In the Great Depression, there were a lot of labor movements. The workers and the Labor Union had organized many protests, riots and strikes. The situation was very different for the current recession. Even though there were mass layoffs at that time, the labor movements seemed to be very weak. The Americans seemed to just accept the situation without any opposition. There are three reasons for this difference: lower unemployment rate, lower union workers and workers' self-image.

In the Great Depression, there was a time when the unemployment rate came to 24.9 percent (shmoop.com). This means within four workers, there would be an unemployed person. This was a very high unemployment rate. With such a bad condition like that, labor movements were unavoidable. In the current recession, the unemployment rate was at peak at 10 percent in October 2009 (bls.gov).The rate of the current recession just equaled half of the Great Depression unemployment rate. We can see that the situation with the current recession was not as chaotic as the time of the Great Depression.

Another reason was the current recession had become global. In the time of Great Depression, the United States was the country that suffered the greatest loss. But the situation in the current recession was very different. The effects when the United States economy slowed down were expanded to many countries in the world. "In November, the WTO scaled down its forecast of global trade growth from 5.5 per cent to 4.4 per cent. For the first time in seven years, India's merchandise exports, expressed in dollars, fell during October. The flight of foreign institutional investors from Indian stock markets is largely attributed to the financial sector crisis, the precursor to the global economic slowdown" (Spoonfeedin). The workers at this time would felt that the situation was unavoidable because layoffs and pay cuts were happening in