The Roaring Twenties and The Savings and Loan Crisis :: American History Economics

The Roaring Twenties and The Savings and Loan Crisis The movie It's A Wonderful Life starts off in the town of Bedford Falls in the time period just prior to the Great Depression. (I will discuss the Great Depression in more detail in a later essay). It is a prosperous time-the "Roaring Twenties." Many people have invested money in the stock market and are earning quite a bit of money, there are many parties had by all with music, food and drinks, and good company and fun. There are also an abundance of inventions (such as the radio) being introduced into the economy. Furthermore, more people are able to afford such luxuries as telephones, electricity, transportation, etc†¦ During this time, in general, a lot of exchange seems to be occurring, as well as overall rapid technological change. This time period is also associated with the rise to dominance of the capitalist system, as more and more people were changing from being self-employed farmers to becoming employees who were paid a wage for their labor time. Another characteristic associated with the 1920s is the growth and expansion of the financial sector. This of course makes sense and seems justified and logical as, in order for the business sector to expand, access to capital (monetary resources) is necessary so that machinery can be bought and labor be "purchased" and employed. The financial sector (banks) took the household savings which were deposited and then loaned them out to big businesses. The big businesses were then able to continue expanding and improving and hiring people, and thus this helped to perpetuate the prosperous economic environment of the 1920s. The Buildings and Loan, as shown in the movie, (the same as what we refer to as the Savings and Loan Industry) was instituted so that individuals (not corporations) might borrow money to build homes. Therefore, where individuals were previously unable to borrow funds, they now could through this institution. This also seemed to help spur along the prosperous envi ronment of the 1920s-at least for a while. In 1929 when the financial markets collapsed, corporations could no longer afford to purchase new machinery or pay for more workers. Workers could not afford to purchase things because they were not making enough money from their wages. This decrease in demand further caused the companies to stop producing goods and to lay off more workers.