Cause of the Great Depression and The Recover

The Great Depression has many theories about how the government made the situation worse, how it made it better, and if the free market failing was the cause of the Great Depression, or if it helped the American economy to recover. Many people even believe that the stock market crash alone was the cause of the Great Depression, but other events were the cause of this terrible time in our nation’s history. I believe that the free market failing caused the Great Depression and the government stepped in to recover the economy.

                One of the main reasons why the free market crashed was because of Black Tuesday, which occurred on October 24, 1929. This was the day when the stock market began to crash. The nation was in panic because the stock market prices began to drop. The stock market collapsed completely on October 29, 1929. A reason why the stock market collapsed was because people buying stocks were borrowing too much money and putting them into stocks. “Many history texts blithely assert that a frenzied speculation in shares was fed by excessive “margin lending.”” The stock market crashed and people could not pay back the money that they borrowed from the banks, which is one of the reasons why banks failed, too.

                We do not have a free market economy today because the government stepped in to control principles, like setting wages. Why would the government not want a free market anymore? Without some control of the market by the government, then we could see another depression arise. It’s true that the government did step in to attempt to recover the economy, like Hoover’s Smoot–Hawley Tariff Act and the government’s decision to lower their spending, and these decisions could have been a reason why the depression lasted for so long. President Hoover was blamed so much for causing the depression to worsen that Hoovervilles was what people called the areas where homeless people would put together scraps of metal and cars for shelter. Even though things looked bleak, Franklin D. Roosevelt as the new President, starting in 1933, the government had a chance to recover the hurt economy with their new leader.

                FDR was able to continue the New Deal program, which Hoover started during his time in office. Some of these programs were the National Industrial Recovery Act, National Youth Administration, and Works Progress Administration. These and other programs helped the economy because they created minimum wages, millions of jobs, and more. Some of these jobs were not much, but it still gave many American’s a job to do. This helped the country in many ways because the government’s participation with the economic recovery and the fact that many were working again gave them hope. Putting money back into the people’s pockets helped the economy because businesses were able to receive money from customers. The jobs given to people by the New Deal programs caused businesses to hire more people and then those people were able to spend their money on other businesses. It’s a domino effect. Some people do not believe in this statement that Lawrence W. Reed said is a myth, but I believe this to be true: “government needs to take an active role in the economy to save us from inevitable decline.” In 1939, the unemployment rate went from 25% to 15% because of the FDR’s New Deal Programs. Another cause of the unemployment rate dropping was because the government started to create new jobs with the start of the participation of the U.S. with World War two in 1941.

                With the view of the Great Depression, I agree with John Maynard Keynes’ theory of economics, which says that the government participating with the economy causes it to grow, and without the government, the economy would fail. If we believe that a free market did not cause the Great Depression, then why do we no longer have a free market economy? 

Charter City

                If I had a city that I could create and make the rules, I would make it so that the people would be greedy as little as possible. We would live in an environment where the citizens would feel safe, happy, and confident. The town rules would encourage acts of kindness like charity towards others. A city is a great place to create rules because, like Paul Romer said in his speech, a village is too small for the benefits that people can get if they live in a larger area, a continent is too big because change in rules would be too difficult, but a city is just right because it’s not too big and not too small.  

                One of the first rules that I would make in a new city is to have the rich pay higher taxes than middle and lower class citizens. I believe that this would make a good effect because when the rich are taxed, they still have plenty of money to go out and buy things to satisfy their wants and needs. If middle and lower class citizens are taxed, they usually have to save their money and pay for the necessities, and not have extra money to spend on other businesses, like going out to eat. So, if the rich and lower classes have extra money to spend after taxes are paid, then businesses would benefit much because of the extra service they receive. And if a business doesn’t receive enough money from customers, then they would have to lay off workers, and they would not have money to spend on other businesses. It is a domino effect.

                When a new product is introduced to the citizens of the city, and it benefits the citizens quite well, then it would be necessary to agree to other cities around us for trade. It wouldn’t even have to be a new product, it could be food that is grown or produced in the city, for example.  In order for the city to grow, it will need to have interaction with other cities and their products. If we stayed in our own bubble, then things could eventually slow down and even end up in chaos. In order for a civilization to grow, it needs help from others. The United States of America would not be what it is today if it wasn’t for trading goods between other countries. In Paul Romer’s speech, he mentioned how back in around the eleventh century, China was a dominate country because of their technology, but as the centuries went by and they didn’t trade with other countries, they were left behind while the countries around it blossomed because of trading with one another.

                Finally, I would encourage welfare to those who are out of work, but only for a limited time. Those out of work would only have welfare for a minimum of one year. I chose this because people are naturally greedy. They decide not to work because they think that they can live off of welfare. They live off of the government’s money. They year that they are on welfare will give them more than enough time to find a new job and support themselves enough to get back on their feet. The city’s government is meant to help people help themselves. It may seem cruel to stop welfare after one year, but they will need to learn to live for themselves, financially. Obviously, if an individual is unable to work because of health reasons, or any other serious reasons, then they will be able to stay on welfare as long as they need it.

                Running a new city would be difficult because a great amount of time would be needed and a lot of bright leaders would need to think of a way for an environment filled with people to run smoothly. The ideas I have suggested would be a good, fair way for the city to run because it gives businesses and the people to benefit greatly in the end if we all work together.  

James Madison's Question

The difficulty that Madison poses is that the government has to have the power to control the people and then control itself, but it’s a very complex goal to accomplish, especially with a new government. When America was a new independent country, the government had to morph itself in order to be able to govern the Colonists, and then be able to control itself. This is the main idea behind primary control. The Government is completely dependent on the people, but the problem is that men aren’t perfect, and because men are governed by men, the government will have some difficulties controlling the people, that is why public virtue is so important. Public virtue is one of the ideas that uphold the Constitution. The seven characteristics that make up public virtue are as follows: first the people need to have a commitment to rule of law. Second, they need a willingness to exercise reasoned self-restraint, compassion and decency. Third, the people need a willingness to serve in public office. Fourth, they need a willingness to set aside private interest for the good of all. Fifth, they need a willingness compromise politically. Sixth they need to be willing to exercise economic temperance. And lastly they need a willingness to practice individual as well as public virtue. The second base that upholds the Constitution is the safeguard of the auxiliary precautions. The auxiliary precautions were put in place to protect the people as well as be a standard for the government. As Madison said in Federalist 51 “We see it particularly displayed in all the subordinate distributions of power, where the constant aim is to divide and arrange the several offices in such a manner as that each may be a check on the other -- that the private interest of every individual may be a sentinel over the public rights. These inventions of prudence cannot be less requisite in the distribution of the supreme powers of the State.” As is evident, checks and balances are the most important. This auxiliary is what allows the Trifold of our government to check itself so that we, in theory, escape corruption. The idea that a Republic government had only one government was abolished and because of the Constitution, the government is divided into three branches, the Legislative, Executive and Judicial. Checks and Balances give each branch a right to examine one another so one isn’t abusing the power given to them by the U.S. Constitution. The Constitution gives a list of what powers the government has to govern the people, and more importantly how they control each other. In order to check the legislative branch, the Executive and the Judicial Branches are given the following powers: the executive uses the power to veto and pull congress into a special session and out of recess to keep them focused. The Judiciary Branch has the power to declare laws unconstitutional therefore making sure that we stay free. The Legislative and Judicial Branches have the opportunity to check the President as well. The Legislative branch can check through the power to impeach, override vetos, and approve or deny judge appointments; while, on the other hand, the judicial branch can only declare actions unconstitutional and the Chief judge stands as the judge when the President gets impeached. The Executive and Legislative Branches check the judicial branch because both are in charge of appointing judges. James Madison as the father of the constitution knew what was best for the American people so they can grow to become the greatest country. 

U.S. Constitution and Inspiration

What about the U.S. Constitution was inspired?

The Constitution has six main inspired pieces, according to Brother Marshall an LDS historian. Brother Marshall’s list includes:  Written constitution, which includes that the power of the government must be limited and restrained. Power of government must arise from the people, which includes that the government must follow the will of the majority of the people. Government must protect the Bill of Rights, which include freedom of the religion and freedom of speech. The Legislative, Executive and Judicial branches powers must reside in separate branches, which include Checks and Balances. The powers have to be divided by national and local levels, which include those enumerated and implied powers from the Constitution. Finally, the principals of economic freedom should be preserved, which include the right of property. Brother Marshall gives many of the major inspirations of the Constitution, and there are many more that God gave to the founding fathers.

How is it that the U.S. Constitution was inspired?

The U.S. Constitution was the first written Constitution. Elder Dallin H. Oaks said, “The United States Constitution… has served Americans well, enhancing freedom and prosperity during the change conditions of more than two hundred years. No wonder modern revelation says that God established the U.S. Constitution and that it ‘should be maintained for the rights and protection of all flesh, according to just and holy principles.’ (D&C 101:77)” Many countries then began to study and write their own Constitutions based off of the U.S. Constitution. Because the founding fathers cared so much for the people of their newly founded country, they prayed, pondered and discussed the issues of the day in order to be prepared to receive the inspiration for a Constitution to organize their country.

Independence and Morals

Declaring Independence

Why did the colonies declare independence from Great Britain? The colonies feared opposing Britain, because at the time it was the strongest country in the world, yet the people of the Colonies were at risk of losing their Natural Rights from the British Government.  Because of the unfair laws that began to reduce many of their rights, what at first began as a movement to change the British system of representation soon became a war for independence. Blood was shed, battles were fought, and sacrifices were made in order for Americans to gain the independence they desired. It was unfair for Great Britain to limit the laws and tax the Colonies the way they did, so the Founding Fathers justified their Revolution through the idea of Natural Law.

                The beginning of the colonial separation from the British Empire began in 1763 when the French and Indian War was over. After losing so much revenue in the war, the British began to assert more authority over the colonies, which had previously been left to govern themselves.  The British began to tax the Colonies to earn money to replenish their treasury. The first tax that the Colonies opposed was the Sugar Act in 1764, the protests being led by Samuel Adams. He did this by advising all businesses to boycott English goods, especially sugar.  This Act actually cost the British money because they had to pay in order for it to be established.  The Stamp Act was later put into effect in 1765, which required taxes on papers, pamphlets, legal documents, and other papered goods. This influenced Adams to request the people to push the boycott even further. Because the British government was, ironically, losing money from these and other taxes, the Stamp, Sugar, and other acts were repealed.  In 1768, Adams wrote the circular letter to the people of Massachusetts to rebel against any of the taxes that the British applied to them. In response to the circular letter, parliament issued the Townshend Acts in order to disband patriot assemblies. The circular letter, however, was successful and caused the people of Boston to boycott English goods.

 Later in the same year, British military arrived in Boston to “control the people,” which was unnecessary because Adams encouraged peaceful rebellion, and was against violence. The people of Boston had their right of property taken away from them when the British passed a law that allowed the troops to live in citizens’ homes, where the owners of the homes were required to feed and supply the soldiers living with them. The soldiers were told to never fire their guns at the public, unless told so by their military leaders. However, on March 5, 1770, an unexpected event occurred: The Boston Massacre. On that night, people of Boston began to throw snowballs and ice at a couple soldiers for punching a young boy for yelling at one of the soldiers for not paying a barber for a haircut. The soldiers then fired at the public, which resulted in three dead and two seriously injured. The right of Life was thus violated, and the people were outraged. This led to Adams’ fight against the British representatives in Boston, asking them to remove the soldiers. Adams won the trial, and the soldiers were removed two weeks later. While Samuel Adams played an important role individually, he was also a part of the Sons of Liberty, a radical group of American protesters. In reaction to the Tea Act of 1773, the Sons of Liberty performed the legendary Boston Tea Party in which they dressed as Indians, raided British trade ships and dumped the tea into the Boston harbor. The parliament responded with the Intolerable Acts, which closed the port of Boston. This pushed the Colonists over the edge because they felt they were justified in their protests against what they perceived as unfair taxation.

                The Founding Fathers wanted to break away from the British Empire because they wanted their Natural Rights, which were established by philosopher John Locke. Locke believed that each man was given certain “inalienable rights” from God. These rights included the rights to Life, Liberty, and Property. Because the Colonists were under the control of the British Empire, they questioned why they were not a part of their Constitution, which gives the people of Britain their Natural Rights. The Colonists argued that they did not have the same rights as their British counterparts. Patrick Henry said, “Give me liberty or give me death.” The leaders were ready to give their lives to defend their rights and break off from the British. Samuel Adams, and other leaders, believed that the British were not treating them right. The British passed the laws to tax the Colonies without letting them have any representation, and the colonists felt as if they were being pushed around by their mother country without having the chance to argue their cause in parliament. It was because of the brave leaders that the Colonies were able to unite and break off from the British. John Locke said, “Between an executive power in being with such a prerogative, and a legislature that depends upon his will for their convening, there can be no judge on earth.”

                In 1774, each of the individual colonies created their own government, which together formed what they called the “Provincial Congress.” In reaction to what they perceived as a challenge to their authority, the British sent more troops over in an attempt to prevent any further governmental union. This led the colonists’ newly formed governments to begin meeting in secret, where Thomas Jefferson penned the first draft of the Declaration of Independence, which was soon after published as a finished work. It was in direct and open defiance of the British government, and showed that the colonists were not to be treated lightly. The British soon declared war on the colonies in 1775, the states joined together to defend their new government from the British, and the American Revolutionary War began.