Great Recession Great Depression & Job Creation Roshni Bhatia • Jamie Clay • Troy Henley-Freeman • Erica Mueller • Mamadou Sissoko
Nov 29, 2014
Great RecessionGreat Depression
& Job Creation
Roshni Bhatia • Jamie Clay • Troy Henley-Freeman • Erica Mueller • Mamadou Sissoko
The Great Depression
The Roaring 20’sThe Roaring 20’s
New innovations♦ ♦ ♦
Rising real wages♦ ♦ ♦
Low unemployment♦ ♦ ♦
Consumer credit♦ ♦ ♦
Stock Market involvement
Stock Market Crash• NYSE experienced run-up in prices
• October 29, 1929 –
Stock market crashed
BlackThursday
• Made poor decisions by circulating less money in economy
• Increased interest rates
The Federal Reserve
The Federal Reserve
Bank Failures
11,000 out of 25,000 failed by 1933
Unemployment Rate
• 25% to 30%
• 12 to 15 million
US Manufacturing
Fell 54% from early 1929 levels
Some European countries depended on U.S. banks for
loans
WWI caused political and economic tension
between counties, making prevention of
depression more difficult
Government Intervention
FDR’s New Deal
WWIWWI
Biggest economic growth
Germany’s GNP rose 51% higher in 1939 compared to
1929
Government spending increased
Similarities & Differences
•Credit fueled bubbles•Government policies
Gold
The Great Recession
TechnologyNothing creating “spin-off” effect
•Most aren’t made on American soil
•Replaced people’s jobs
Computers
–––––––––––––––––––––––––––––––––––––––
i.e. railroads, cars, interstate highways, steam
FinanceFinance
During the 1990s, financial sector During the 1990s, financial sector became the most dynamic and became the most dynamic and
exciting part of the economyexciting part of the economy
Investors continue to multiply Investors continue to multiply money without producing or money without producing or
providing serviceproviding service• • •
The Federal Reserve
The Federal Reserve
Realized driving force of housing market
• • •
Interest rates held at historic lows →borrowing became easier
• • •
Investing services gave good credit ratings to giant firms
Housing Market
• By 2006, 70% of households paid mortgages, an all-time high
• 2001–200640% of new mortgages were sub-prime
• No regulations→ bubble burst
• Loans went into default
Definition:
Job Creation programs are used by governments to help reduce unemployment and secure those are employed
Job CreationJob Creation
Evolution of Job Creation
1929 – Unemployment rate: 22%
1932 – New Deal introduced
1939 – Unemployment rate: 16%
2003 – Unemployment rate: 6%
2004 – American Job Creation Act
2007 – Unemployment rate: 10%
2011 – Obama
New Deal
• Civilian Conservation Corps (CCC)Restoration of forestation
• Civil Works Administration (CWA)“Boy Scouts” Work
• Public Works Administration (PWA)Improved public resources
• Works Progress Administration (WPA)Created jobs through construction
American Job Creation Act
• President George W. Bush
• Effective October 2004
• Provisions Included
• Steady growth in jobs for 52 months
• Still only 8 million jobs created
Job Creation
• Present Day & small businesses
Analysis & Evaluation
• Summary of economy today and how job creation is the solution
Works Citedhttp://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1867127http://en.wikipedia.org/wiki/Job_creation_programhttp://www.investopedia.com/terms/a/americanjobcreationactof2004.asp#axzz1et9lWj7Ihttp://www.u-s-history.com/pages/h1586.htmlhttp://www.helium.com/items/580881-the-civil-works-administration-during-the-great-depressionhttp://www.pbs.org/wnet/blueprintamerica/reports/profiles-from-the-recession/report-bridge-to-somewhere-public-works-administration/693/http://www.indiana.edu/~liblilly/wpa/wpa_info.htmlhttp://www.bizjournals.com/sanfrancisco/news/2011/11/04/uc-berkeleys-big-ideas-job-creation.html?page=2]