George Stigler's Contributions To The Great Depression

Powerful Essays
1.) Entitlements: After a prosperous or roaring twenties, the stock market crashed on October 29, 1929. With banks failing, businesses closed and millions found themselves out of work. When the Great Depression began, millions of elderly and disabled people were already living at a bare level. When they couldn’t get enough money and food, riots vegan to break out. Thousands of homeless lived in parks and streets. School budgets were cut, and many schools were shut down. Those that had any savings saw that their money had been lost when the banks crashed. In response to the Great Depression, President Franklin Roosevelt began the New Deal. His plan was to create programs and jobs for unemployed workers. He strongly believed in the federal government…show more content…
This is a process in which regulatory agencies get overtaken by the industries they were in charge of regulating. This happens when an agency, which is supposed to benefit the public interest, begins to act in ways that benefits the industry it’s supposed to be regulating instead of the public. It is actually a form of political corruption because it benefits the company and special interest groups. It creates a way for political groups to use these agencies to benefit themselves in a way that is wrong to the public. Regulatory capture happens because groups or people who strongly want a particular political outcome will focus their money and energy on making sure things go their way while the general public, who has less interest, will pay less attention to it, or ignore it completely. Interest groups will then focus on those agencies and attempt to influence the staff and members of the regulatory agency so that their interests are put into place. There are two types of regulatory capture: materialist capture, or financial capture and non-materialist capture, or cultural capture. Materialist capture is when the regulator is convinced by bribes, donations or the desire to keep funding. Non-materialist is when the regulator begins to think like the industry that it’s regulating. A good example of regulatory capture is the Food and Drug Administration (FDA). The FDA is accused of acting in the interests of agricultural, food and drug companies at the expense of the public’s health. Many believe that drugs with bad side effects that should not have been released were allowed because of the company’s deal with the
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