Decrease in Buying and Selling of Goods

When an industry or social class fails, it is expected for others to rise and compensate for it. But during the Great Depression, they could not compensate due to the chain reaction that happened. After the stock market crashed, the rich were afraid of spending lots of money since they had lost some of it. This meant that they wouldn't buy as many goods industries produced. This led to there being an overproduction of goods with no one buying them. The poor could rarely buy anything without credit, but with their low wages and the Depression, they couldn't pay back the loans. This meant the middle class would have to compensate and buy goods, but a lot of them were losing their jobs because no one would buy the goods and they had to be laid off. This was a problem in the lower and middle class, which led to a cycle of people not being able to buy things because they lost their jobs, so more people would be fired because the industries weren't selling enough products. The book mentions that this could have been avoidable if the Federal Reserve hadn't increased the interest rates on loans because then banks and companies could have stayed in business, leading to more people working, and in turn more money to buy goods, which would keep businesses and industries alive and making products.