January 12-16

[7maddie lotenschtein]

Monday (12th)- Stock market- buying a piece of a company. Located in NYC. We also started "The Stock Market Game". For most of third quarter we will be investing/ buying/ sharing stocks online. 

Tuesday (13th)- 

-Consumerism- spend enough money to help the economy (helps the company make money)

-Buying on credit-Buy now, pay later. It allowed middle/lower class people to buy expensive items. Problem: It puts you into debt. 

Republican Philosophy of Harding, Coolidge, Hoover- 3 of the republican presidents that dominated during the 1920's. 

-Laissez-faire- "Let them be". Government should stays out of your business.  

rugged individualism- Its up to you. Don't depend on anyone else,no help.  

trickle down theory- states that government will give tax breaks to the wealthy ( Business owners, entrepreneurs) They will be able to expand their businesses and be able to give more people jobs. 

-Stock- buying and selling shares 

-Stock market- where you buy and sell stock 

-Dow Jones Industrial Average- 30 largest company's  in the united states. Own Disney, Nike, Mcdonalds, Verison, and Walmart. 

-Buying on margin- buying stocks on credit. It allowed middle/ lower class people to get in the stock market. 

-Watered stock- overpriced stock

-Stock pooling-No rules or regulations to the stock market.When Wealthy people would buy cheap stock and sell it for 50 dollars per share. 

-Speculation-with stocks- someone that buys and sells stock for a quick profit. You can make money quickly or lose money quickly. 

-income inequality- Social inequality- There was a big gap between the rich and poor. 

-Federal Reserve Board- created in 1913. It controls our economy. Major goal at the time was to stop banking runs. It was a bankers bank. They control the amount of money in circulation. They could take money away or put in more money. (ours is in Chicago) 

Wednesday (14th)- Bomb Threat.  

Thursday(15th)- We discussed what had happened yesterday and how we handled the situation.We also watched a video on the US income distribution. It was really interesting how the income was split up; I had no clue! 

Friday(16th)- I was gone at a wrestling meet.

--Stock Market Crash Causes - Prices were grossly inflated, didn't have real value - watered stock (Overpriced)

                                                   - Over speculation during 1920's led to watered stock

                                                   - Buying on margin - led to people in debt and watered stock prices

                                                   - Overproduction of goods, uneven distribution of wealth, too much borrowing from banks

                                                   - Federal Reserve increased interest rates and lack of government regulation - no rules

--Stock Market Crash Effects - Investors and businesses lose millions of dollars

                                                  - Thousands of banks fail - savings are wiped out

                                                  - Businesses cut production - lay off workers

                                                  - Unemployment rises - people quit spending money

                                                  - Great Depression sits in

                                                  - Depression spreads to Europe and all around the world

--Great Depression Causes - Overproduction of goods - Under consumption of goods by consumers

                                                - Agricultural slump due to overproduction

                                                - High protective tariff policies of the 1920's

                                                - Taxes benefiting the rich, the rich got richer; the poor got poorer

                                                - Stock Market Crash

 --Great Depression Effects - New Deal programs start - makes the U.S. government much larger

                                                -  Deficit spending starts

                                                - The New Deal creates many organizations that are still around today - social security, welfare

                                                - Fascist, military and communist dictators come to power throughout the world

--Vicious Cycle of The GD - Companies lose money so they lay people off 

                                              - Unemployment rate goes up and less people buy goods as income has dropped

                                              - Companies profits fall so they have to lay more people off or close

                                              - Cycle repeats iself