Embedded Files
To understand the the New Deal, we must first understand the crisis it was born out of: the Great Depression. The best way to gain a perspective on why the Great Depression was so traumatic is to look at the economic numbers. Below are three graphs of major economic data (the Gross National Product, Dow Jones Industrial Average, and Unemployment Rates) which give a powerful overview of exactly how dramatic the Great Depression was and why it was the most serious economic depression in U.S. History.
1. Gross National Product is the value of all the products and services produced by a nation. More than any other statistic, it summarizes the economic state of a country, as this is the value of everything a nation produces. Consider how the GNP of the U.S. changed during the Great Depression.
2. The Dow Jones Industrial Average is an average of the stock price of major companies. Stock price is basically what investors consider a company to be worth. The Great Depression had the largest drop in stock price in the history of the stock market. It would take 25 years before prices returned to their 1929 levels. (In investment terms this means it would take 25 years for the money you invested in an average company to be worth your originally investment!)
Crowds gathering on Wall Street on Black Tuesday, the day the stock market crashed
3. While the above are faceless economic data, these numbers did of course affect real people. This is perhaps most clearly quantified in the unemployment rate (the number of workers who have no job). The following is a chart of unemployment in the U.S. for over 100 years from 1890-2009. Consider how unemployment during the Great Depression (1929-1939) compares with the rest of U.S. History.
Page updated
Report abuse