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]