Jason T Eastman Assistant professor of Sociology at the Coastal Carolina University Says the Great Depression of 1929 was a direct consequence of the Gilded Age and it's Laissez Faire Policies.
The Gilded age which followed the Civil War with it's westward expansion,increased immigration and industrialization was a period of time which saw many industrial advances and people like Carnegie,Mellon,Morgan ,Vanderbilt and J.D. Rockerfeller all took advantage of those advances and all amassed huge fortunes for their time. But their good fortunes was at the expense of the greater social good. The term Gilded Age was named by Mark Twain who saw it as a time with a thin veneer of glittering Gold covering the deep seeded ugliness underneath. While the above lived lavished life styles the working class that they employed lived lives of absolute desperation and misery. Children were often employed as well and worked long hours in very dangerous conditions. Because they were the smallest in stature in the Coal Mines they were often used to crawl into places where adults couldn't fit. Aside from the horrible conditions that the masses found themselves in, the concentration of wealth became very corrosive politically with the object of rigging the system, so that those well placed people could profit even more and avoid culpability for their crimes.
A notable example concerned Jay Gould a Rail Road Baron of the time. Jay Gould use his political connections to create inflation by manipulating the availability of Gold, which then forced commodities traders to import goods like wheat from western countries in order to increase those supplies. The importation of those goods then cost inordinate rates on Gould's trains. This actually caused the Black Friday Stock Market Crash of 1869.Eventually the Grant administration stopped the practice but Gould was never charged. This type of dealing was common place as robber barons exerted their oligopolistic control of the economy to maximize their gains.
There was some push back in the early 1900 but the great world war and the roaring 20s largely left the situation ignored. The Gilded Age says Professor Eastman not only lasted until the Great Depression of 1929 but the inequality and corrosive economic practices of the age largely caused the depression. During WW1 large amount of capital flowed from small investors, many of whom bought on margin. Margin is borrowing the money to invest in the market. Financiers then used other peoples borrowed money enhance their own investments by taking advantage of the inflated prices that came from over demand. But on Black Thursday 1929 it was obvious that the inflated value of the stock could no longer be maintained and then the market crashed.
The subsequent run on the banks meant that people who di not even gamble in the stock market on Wall Street lost their savings Then Businesses failed due to lack of demand. And lack of capital and credit lead to economic stagnation.
Today we see some correlations with the extreme concentration of wealth into the hands of a few and the relaxing of economic controls by politicians at the request of their corporate masters . Some of the major differences are that under Hoover nothing was done the Robber Barons of today used their influence to force their tools in congress to pass legislation that ultimately allowed them to (Privatize their profits while Socializing their losses) in the form of bail outs. It seems that these social conservative only hate Socialism when it benefits the poor. Yet it is the poor who are the real producers of wealth through their labor. So for those who are so afraid of working people getting a break, why are you not afraid of Rich people who force our government to SOCIALIZE THEIR LOSSES VIA BAIL OUTS BUT INSIST ON PRIVATIZING THEIR PROFITS?
The Gilded age which followed the Civil War with it's westward expansion,increased immigration and industrialization was a period of time which saw many industrial advances and people like Carnegie,Mellon,Morgan ,Vanderbilt and J.D. Rockerfeller all took advantage of those advances and all amassed huge fortunes for their time. But their good fortunes was at the expense of the greater social good. The term Gilded Age was named by Mark Twain who saw it as a time with a thin veneer of glittering Gold covering the deep seeded ugliness underneath. While the above lived lavished life styles the working class that they employed lived lives of absolute desperation and misery. Children were often employed as well and worked long hours in very dangerous conditions. Because they were the smallest in stature in the Coal Mines they were often used to crawl into places where adults couldn't fit. Aside from the horrible conditions that the masses found themselves in, the concentration of wealth became very corrosive politically with the object of rigging the system, so that those well placed people could profit even more and avoid culpability for their crimes.
A notable example concerned Jay Gould a Rail Road Baron of the time. Jay Gould use his political connections to create inflation by manipulating the availability of Gold, which then forced commodities traders to import goods like wheat from western countries in order to increase those supplies. The importation of those goods then cost inordinate rates on Gould's trains. This actually caused the Black Friday Stock Market Crash of 1869.Eventually the Grant administration stopped the practice but Gould was never charged. This type of dealing was common place as robber barons exerted their oligopolistic control of the economy to maximize their gains.
There was some push back in the early 1900 but the great world war and the roaring 20s largely left the situation ignored. The Gilded Age says Professor Eastman not only lasted until the Great Depression of 1929 but the inequality and corrosive economic practices of the age largely caused the depression. During WW1 large amount of capital flowed from small investors, many of whom bought on margin. Margin is borrowing the money to invest in the market. Financiers then used other peoples borrowed money enhance their own investments by taking advantage of the inflated prices that came from over demand. But on Black Thursday 1929 it was obvious that the inflated value of the stock could no longer be maintained and then the market crashed.
The subsequent run on the banks meant that people who di not even gamble in the stock market on Wall Street lost their savings Then Businesses failed due to lack of demand. And lack of capital and credit lead to economic stagnation.
Today we see some correlations with the extreme concentration of wealth into the hands of a few and the relaxing of economic controls by politicians at the request of their corporate masters . Some of the major differences are that under Hoover nothing was done the Robber Barons of today used their influence to force their tools in congress to pass legislation that ultimately allowed them to (Privatize their profits while Socializing their losses) in the form of bail outs. It seems that these social conservative only hate Socialism when it benefits the poor. Yet it is the poor who are the real producers of wealth through their labor. So for those who are so afraid of working people getting a break, why are you not afraid of Rich people who force our government to SOCIALIZE THEIR LOSSES VIA BAIL OUTS BUT INSIST ON PRIVATIZING THEIR PROFITS?
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