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The Economy Inspires Trust • Wonderful prosperity – Stock market sky rockets throughout the 20s – Real wages climb 40% in the 20s – Low unemployment • Everybody ought to be rich – Business is good, people are confident in business – Investments bring people lots of money The Economy Inspires Trust • Welfare Capitalism – Employers raise wages – Better benefits include paid vacations and health plans Signs of Trouble • Uneven Riches – The economy was truly out of balance despite what it seemed • Economy was dominated by huge corporations not small business • Mainly the rich got richer not everybody • Personal wealth was very unbalanced – .1% had incomes over 100,000 – 71% made less than 2,500 – 80% had no savings Buying On Credit • Installment buying – Purchasing expensive items and pay, with interest, over many months • Get rich quick – More and more people are playing the stock market – People that don’t have the money buy on margin • Pay only a percentage of the price and borrow the rest Signs of Trouble • Too many goods, too little demand – Production rose faster than real wages • Causes a surplus of goods – Many industries slumped as a result of over production • Farmers have hard time – Farmers have an increase in production but a decrease in demand – Crop prices fall – Farmers can’t afford to pay for land or machinery “We were in the Depression before 1929, we just didn’t call it that.”