Ben Bernanke Speech at William and Mary

1763 Words8 Pages
The early 1920’s, also known as the “Roaring Twenties” was a time of peace and prosperity in America after World War I. Consequently, the average consumer had more money to spend and therefore invest. However, this era of economic optimism came to a screeching halt in 1929 on Black Tuesday, when the Stock Market crashed and fiscal chaos began in the United States. A nationwide panic ensued when stock prices plunged beyond the point of recovery and there was no one willing to buy the shares that investors were so desperate to sell. However, the Stock Market crash of 1929 was just the beginning of a deep economic depression. Since so many banks had invested their client’s money in the stock market, they were forced to close once the market crashed and the client’s money had vanished. When the American people saw how many banks were closing, they rushed to their bank if it had not already shut down, to withdraw their savings before it was too late. This “rush on banks” caused a second wave of bank closures and bankrupted consumers if they were not lucky enough to get to the bank in time. Financial downturn then trickled down into the business sector because most institutions had their capital either invested in the Stock Market or held in a bank. Failing businesses led to double digit unemployment rates and a huge cutback in consumer spending on even the most basic items. Most Americans felt the effects because it was so widespread throughout all sectors of the country’s financial structure. It was not until World War II, a decade later, that the country finally made a full recovery. Due to the greater need for laborers and new technology during the war, unemployment decreased and government spending helped strengthen the nation’s economy. Ben S. Bernanke is currently concluding up his 8-year term as the Chairman of the Federal Reserve Bank in the United
Open Document