Before 1929, Americans lived a prosperous life and had never experienced an economic downturn, and in their eyes, it was a matter of course that life was getting better day by day, just as it was common sense for water to flow down.
1. Local problems of the economy
However, the Great Depression came as scheduled in 1929, and many people have heard of the Great Depression but don't know what it is, and you may not even be aware of it. This is like the average score in the class this exam is 5 points less, and you don't notice it, because your score is still so much as last time, you ask your tablemate, he may even take two more points, and the real reason may be that a considerable part of the students in the class are too poor to drag down the average score, which can only be seen by the teacher through the monitoring of macro data (class average score).
The economic problem is like this, for a huge economy, it is always hot and cold, everyone has more income, the business of luxury goods and quality goods is good, and low-end goods are not easy to sell; When everyone's income is low, luxury goods and non-rigid goods will be cold, and cheap and affordable goods will be hot; If the network economy is good, the express delivery will be hot, the physical store will be cold, the network economy is poor, the physical store will be hot, and the express delivery will not be good; Even if there is a war, the grain and ** business must be booming; Even if the people are struggling and all industries are depressed in the end, the wild vegetable and bark business will be the next outlet; The wild vegetables and bark have been eaten, and Sun Erniang's business will only be better.
If we always get stuck in the local discussion of the economy, there will always be some people making money, and we will never come to the right conclusion, so in the end everything has to go back to the data level.
2 Depression in terms of data
For the definition of the Great Depression, we also have to look at the economic data of the Great Depression in the United States:
1) **On October 29, 1929, the "Black Tuesday" stock market crash broke out in the United States, and the Dow Jones index fell by 22% in one day and 48% in a month, and then produced a series of chain reactions in the financial system, which eventually led to the arrival of the Great Depression.
In a fair and transparent market, the stock price is the future value of the company in the eyes of investors, that is to say: investors' views on the future value of the company can be quickly expressed through the tool of stock price, and the collapse of stock price actually reflects the collapse of investors' confidence in looking at the future; The characteristics of this tool are that it is very efficient and cannot be faked, just like an international event is an efficient and unfalsified tool that reflects the level of the national football team; Some areas have such tools, while others don't.
2) Unemployment rate: The overall unemployment rate reached 25% at its peak, if you were in that period, you should probably have a job, if you happen to be a person who doesn't watch the news, or the United States at that time chose to turn a blind eye to economic problems, then you probably can't feel that the depression is coming.
3) CPI: The CPI (Consumer Price Index) has been declining for five consecutive years since 1929, and the unemployed are unable to spend, and even those who are not unemployed have begun to save money because they are afraid that they will be fired in the future. If the commodity cannot be sold, it will decline, and the decline of a large area of commodities is deflation.
4) GDP: Deflation will further force producers to go bankrupt or reduce production, and industrial and agricultural production will naturally contract, which is reflected in the fact that GDP (gross national product) has been declining for five consecutive years since 1929, which is highly overlapping with the decline in CPI.
Producer bankruptcies or production cuts lead to more layoffs, which in turn lead to weaker consumption......The economy entered a death spiral, which was not broken until Roosevelt's New Deal in 1933, when a large number of jobs were created by investing in infrastructure.
5) Fertility rate: from 2 in 192866 fell to 2 in 193317, the problem of fertility is very wonderful, the economy is too poor, women's education level is improving, social pressure, etc. are all good contraceptives, which really have to be combined with other data.
If the data released by the United States at that time were true, then these data basically met the definition of economic depression, but in view of the fact that the data fraud was only upward, there was no reason for downward fraud, that is, even according to the most optimistic estimates, the Great Depression was already confirmed.
3 The impact of the depression on the average person
The impact of a depression on everyone is undoubtedly huge, and if you happen to be unemployed, a pay cut, or an investor, you will feel it the most.
If you're the boss, then depending on what industry you're in, some industries may still be struggling to support it, such as the automotive industry, which has experienced massive inventory backlogs and layoffs, and has launched a large number of cheap models to adapt to the drastic changes in the market. Some industries simply collapsed on a large scale, and half of the banks in the United States failed during the Great Depression.
And some industries may still be thriving, and people who have lost the hope of working hard have a particularly large demand for entertainment, after all, people who need to work overtime to catch up are now leaving work on time, what can they do if they don't find some entertainment? After all, there are still 75% of people who have income, can't they afford to buy a car, and can't they afford to buy movie tickets? Hollywood produced many classics during that period, such as the epic "Gone with the Wind" and "Gone with the Wind", Spielberg's "Jaws" and Chaplin's "Modern Times", all of which were classics at that time; In addition, companies that provide cheap essential food and cheap drinks are also popular, such as Kellogg'Food and beverage companies such as Heinz, General Mills and Coca-Cola have survived with ease.
If you're none of that, then you're lucky that your feelings about the recession may come more from your eyes and ears than from your wallet, and such people may not even be a minority in absolute numbers. Maintaining a keen sense of observation, being soberly aware of the state of the general environment, staying healthy, saving money to prevent unemployment, working hard, not quitting or changing jobs, are all ways that ordinary people can cope.
Realize that you are most likely an ordinary person, ordinary people don't want to invest in entrepreneurship at this time, in the case of economic contraction, the chances of ordinary people succeeding are especially slim.