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The American Evolution: The Economy

READ MORE: American Evolution of the economy
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We begin a month long look at the American Evolution for November with a look at the economy and its similar evolution. If we have heard one constant word these past several months, it has been change. Our economy has changed dramatically and not for the better. That helped bring about dramatic political change earlier this week. We are entering a new era with huge economic uncertainty and a political open book. But we have been here before. The mid 2000's saw an unprecedented real estate boom. The stock market rose into uncharted territory, credit was plentiful and easy to get. To Americans of a certain age that might sound all too familiar. In the 1920’s, real estate was hot and so was the stock market. People were borrowing money to buy stocks. It all came to a screeching halt on October 29th, 1929. Black Tuesday, or the crash. The great depression was underway. It would become the benchmark by which we would measure hard times. Tom Simpson was a senior staff member at the Federal Reserve before retiring to Wilmington and an executive in residence position at UNCW. He sees one particularly chilling parallel to the great depression and today. "Another similarity is that financial institutions are very much in the middle of what's going on today as they were in the 1930's. So when we get these big drops in asset values they affect financial institutions substantially in their heath, well being, and ability to provide financing for the economy. And that has a potential impact on the economy." Things went from very bad to very much worse when the banks started going under in the early 30's. The Hoover administration largely waited on the sidelines in the early part of the downturn, confident that the economy would shake itself out. It didn't. Jobs went away as bread lines and desperation grew. None of this was lost on current fed chairman Ben Bernanke, perhaps one of the country's leading scholars on the great depression. Bernanke led the federal bailout charge when things turned upside down earlier this year. So it seems the economists learned from the great depression, but what about the politicians and the people who lived through it? We’ll have more about the American Evolution throughout November.

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