During the 1920s, the American economy soared. Companies were expanding and making record profits. The working class was happily buying products on credit, which caused a false sense of security in the economy.

But American businesses had overexpanded. The wealthiest one percent of Americans owned 33 percent of assets in the U.S. This meant that a lot of money was in the hands of a few. Banks lent money without collateral, and middle-class debt grew. Agricultural prices remained low. And then the stock market crashed.

In 1928, President Herbert Hoover was inaugurated, but his minimalist approach to government intervention during the Great Depression made him very unpopular.