The stock market crash could have been prevented

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Andrew Bernstein implies that the stock market crash could have been prevented, if:

people had more information about the economy; he estimated that profits rose 387% while stock prices rose 385%. This means that the stock market prices rose not as a result of speculation, but as a result of businesses doing well.

the government had raised taxes instead of lowered them. Raising taxes could have generated more revenue for our country. This would have given the government the ability to bail out failing companies at the time of the stock market crash.

All of the above are factors Andrew Bernstein mentioned as reasons why the stock market crash of 1929 could have been prevented.

the government had increased its spending before 1929 instead of during the 1930s. Increasing spending creates jobs. This increases confidence in the economy and would have prevented the psychological selloff in October of 1929.

Reference no: EM131607777

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