Compare and contrast the great depression and todays great recession Essay

Compare and contrast the great depression and todays great deferral - Essay ExampleTherefore, it is relevant to correlate historical experience of 20s with the current processes in the economy. In govern to show distinctions and parallels between the Great Depression and the Great Recession, it is required to analyze the reasons of these periods in the American history, account parallels between them in order to develop lessons for the future practical implementation of successful strategies and avoid mistakes of the introductory years.Another supposed reason for the Great Depression is often found in banks collapse. When investors took away their cash from the banks to deliver debts, nearly 9,000 banks failed in less than 10 years. Therefore, a credit crisis occurred. Those individuals who had bank accounts lost their savings and businesses did not have an ability to expand. Furtherto a greater extent, this drastic economic situation was also spoiled by a slow process of reces sion. People were afraid of spending their money and many companies had to decrease their production levels. As a result, a great number of unemployed people occurred. The American government managed to correct the ambitious situation and introduced The Smoot Hawley Tariff act of 1930. In accordance with this Act, American companies could easily trade with international companies and pay fewer taxes. Still, the government could not resist dust and drought storms, which devastated agricultural sector. As a result, the prices for food were high and poverty rates increased as well. As far as we can see, in that location are many parallels which can be found between the Great Depression and todays Great Recession. Let us focus our attention on the reasons that triggered the Great Recession.In 2008 only 19 banks have experienced bankruptcy. In 1930, 744 banks failed. In 30s, banks were protected by the FDIC (Federal Deposit Insurance Corporation) (Chee-Heong Quah and Crowley, 2009). Still, this system is more beneficial for banks nowadays. In