Understanding Economic Crises and Their Impact on Society

Porguerra Ecnomus: The Situation: There were heavy losses and spending; the only exception was the U.S., which became the great industrial power. They had to resort to inflation, state intervention, and other measures that contradicted the principles of economic liberalism. The post-war unrest in Europe attempted to recover the normal pre-war economy.

Crisis of 1929: The U.S. was the best reflection of confidence in the future, experiencing a significant economic expansion. The population contracted credits and speculated on the New York Stock Exchange, aiming for profits. October 24, 1929, was Black Thursday on Wall Street. That year, several warnings generated suspicion among speculators, leading to a massive sell-off as everyone wanted to minimize their losses.

European Crisis: The stock market crash accumulated numerous problems, and the absence of an adequate response by monetary authorities led to an unprecedented economic crisis known as the Great Depression. This crisis extended throughout the thirties, resulting in severe economic consequences. Many companies closed, and the unemployment rate skyrocketed. New economic losses, bankruptcies, and layoffs occurred. Serious deflation worsened the situation due to the absence of loans and credit. The arrival of the crisis in Europe was marked by a significant downturn.

American Way of Life: The American way of life was popularized by Hollywood cinema.

Gangsters: Gunmen from mafias who were supported and enriched by commercializing prohibited items, prostitution, gambling, and drugs.

New Deal: A model developed by President Franklin D. Roosevelt in the United States from 1933, where the state led the way to recovery.