What Caused the Great Depression and How Similar to These Causes Are Things Today

It had been a time of unprecedented prosperity in America. Everybody seemed to be capitalizing on the continued economic growth and it looked like the good times would never end. Gradually, however, some dark clouds appeared on the horizon. Oh, sure, it was easy enough to ignore the signs that something bad might be on its way since the nation's fundamental economic frame remained secure. Construction was booming and new inventions were quickly transforming from luxury items to essentials. Yes, there were problems in such sectors as textiles, steel and iron, but overall things looked pretty gosh darn swell. It wasn't until farmers began to feel the pinch that the experts really sat up and took notice. Over the course of just a few years, farming income halved and hundreds of thousands were forced to give up their farms, property and equipment.

In short order, construction began to take a toll. Over the course of three years, new construction starts fell from 11 million to 9 million units. With people no longer building houses or offices, there was little need for furniture to decorate those non-existence entities and so furniture inventories exploded. Companies responded to the drop in profits by cutting their workforce. Besides furniture, appliances for the household also suffered and those companies soon began cutting their labor force as well. The year was 1929, not 2008, but the similarities are striking.