What Is The American Dream Essay

2725 WordsDec 1, 200811 Pages
What is the AMERICAN DREAM 10/5/2008 How Did America get herself into the current crisis, and how does she get herself out. How did America get into debt, and how does she get herself out? To answer this question we first have to look at the Great Depression. Not many people remember the Great Depression, due to the fact that it was too many years ago, and unfortunatly we did not learn our lesson. On October 29, 1929, the stock market crashed which is also known as Black Tuesday. In the wake of the 1929 stock market crash and during a nationwide commercial bank failure and the Great Depression, two members of Congress put their names on what is known today as the Glass-Steagall Act (GSA). This act separated investment and commercial banking activities. At the time, "improper banking activity", or what was considered overzealous com-mercial bank involvement in stock market investment, was deemed the main culprit of the finan-cial crash. According to that reasoning, commercial banks took on too much risk with depositors' money. As a collective reaction to one of the worst financial crises at the time, the GSA set up a regulatory firewall between commercial and investment bank activities, both of which were curbed and controlled. Banks were given a year to decide on whether they would specialize in commercial or in investment banking. Only 10% of commercial banks' total income could stem from securities; however, an exception allowed commercial banks to underwrite government-issued bonds. Financial giants at the time such as JP Morgan and Company, which were seen as part of the problem, were directly targeted and forced to cut their services and, hence, a main source of their income. By creating this barrier, the GSA was aiming to prevent the banks' use of deposits in the case of a failed underwriting job. Now I come to what is the AMERICAN

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