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Originally Posted by hopi watcher  The main contributors to the crash was greed and small government. If you care to check youi will find that the vast majority of US citizens in work where on pay levels below $2000 pa.
The five headings given for the crash are as follows,
Agricultural Recession.
Boom and Bust.
Mismatch between production and consumption
Inequality of wealth distribution
Weaknesses in the Banking System |
The Crash is only a symptom of a much bigger problem. The stock market had already started to sag about 5% in early 1928, but the Fed delivered the killer inflationary blow - a $300million dollar purchase of acceptances. The money supply increased about $2billion and the stock market soared once more.
Even today, there is a great deal of ignorance of the monetary expansion when it comes to bull markets - notice how Zimbabwe had the best performing stock market in 2007!
Moreover this inflation did not enter the economy evenly, but rather capital goods industries. Pig iron workers' wages rose very extensively for instance.
I think you are engaging in circular reasoning when you blame "agricultural recession" and "boom and bust" as causes of the crisis.