The following is an article I wrote a few months ago to answer the question, “What was the social impact of the Wall Street crash in the USA?” This article tries to make sense of the recent collapse of the American economy. It also seeks to point out what the long-term implications are for the stability of the American financial system. Now that it is finally over, and we are officially back on the right financial track, let’s evaluate the social and political consequences of all that.
First, it is important to recognize that the recent financial market crash was a product of both technical and fundamental factors, and to a large extent, both contributed to each other Essay Wall Street. On the one hand, we had the effects of runaway inflation, which made real goods increasingly costly relative to previous standards.
Social Impact of the Wall Street Crash
On the other hand, there were widespread unemployment rates (which doubled or tripled in some regions), rising fuel costs, growing consumer debts, financial panics, and a multitude of other shocks to the system. While it might not seem relevant, the impact of the Wall Street crisis on the American psyche and sense of values has been profound, to say the least.
When assessing this issue from a sociological perspective, it is important to remember that human beings are psychologically programmed to try to avoid risk as much as possible. In this situation, increased uncertainty about future financial outcomes created a climate of negative expectation about the future, which in turn led to dramatic behavioral responses. The end result was a run towards homeownership and the perceived protection of the homeowner, which further increased the risk/loss element and further decreased investment opportunities.
This vicious cycle is likely to endure for years, as many people either hold on to their homes or do not purchase at all. The bottom line is that whatever the policy choices after the collapse, it is likely to take years for the American economy to recuperate from the large scale failures that occurred during the past few years, and it could take decades for the financial markets to bounce back from the events that transpired in 2021.