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No How depressing Great depression market in front It's coming

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Some people come a bill others just call me cash

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but you you can call me boss just josh and

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i'm really a nice guy I went to get to

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know me want to know what wasn't nice the greater

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the broch rawdon on point with the evil music today

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huh Thie great depression was as bad as the name

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implies This tidal wave formed in october nineteen twenty nine

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when the american stock market collapsed The dow industrial average

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the primary measure of the stock market back then peaked

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in september nineteen twenty nine at three hundred eighty one

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point seventeen points and would plunge to a staggering forty

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one point twenty two points by nineteen thirty two Okay

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some context might be useful here The proceeding decade was

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known as the roaring twenties due to rising income inequality

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and general debauchery by fancy folks The stock market crash

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ended this decade of decadence in an instant The story

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of the great depression can be told with a litany

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of the leak statistics It was like a magic trick

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Billions of dollars in assets disappeared Just like that Wealthy

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americans who owned almost all the nation's stock at the

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time were walloped by an eighty percent decline in the

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value of their holdings More troubling to the wider population

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were rampant bank failures between nineteen twenty nine and nineteen

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thirty three Two out of every five banks in america

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collapsed effectively annihilating more than seven billion dollars of their

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customers Hard earned savings By nineteen thirty three the country's

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gnp i'ii gross national product had fallen to barely half

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of its nineteen twenty nine level which is huge Imagine

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if your country suddenly started producing half the amount of

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products as usual there probably wouldn't be any good job

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opportunities right What's more it could even lead to higher

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prices as a reduced supply of something usually causes increased

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demand which is known as the law of supply and

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demand The combination of few jobs and high prices huh

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Sounds like a recipe for disaster Industrial production fell by

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fifty percent Production of automobiles dropped by two thirds The

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steel plants operated at just twelve percent capacity Bad times

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people all around These were big booming industries at the

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time So it's a huge deal that they went sour

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it be like apple suddenly stopping production on the ipad

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The horror The unemployment picture is even nastier if you

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can believe it Between nineteen twenty nine and thirty three

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more than thirteen million americans lost their jobs Of those

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sixty two percent found themselves out of work for longer

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than a year forty four percent longer than two years

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twenty four percent longer than three years and eleven percent

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longer than four years Can you imagine being an adult

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without a Job 4:4 years At that point you're basically

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retired unemployment peaked at a staggering twenty four point one

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percent in nineteen thirty three and never drop below fourteen

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point three percent until world war two For context the

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unemployment rate has never surpassed nine point seven percent in

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all of the economic downturns since the economy got so

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bad that even calvin coolidge who's business friendly presidency had

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fueled the roaring twenties boom lost faith in the free

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markets ability to fix itself A turning point came in

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nineteen thirty two when franklin delano roosevelt was elected president

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of the united states Shortly after taking office roosevelt made

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it his mission to deliver relief recovery and reform the

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so called three r's he allegedly wanted to include a

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fourth our rodeo but his advisers counseled against it Roosevelt

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christened his relief efforts the new deal This ambitious plan

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begun during his first hundred days in office created a

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host of new government programs including the civilian conservation corps

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and works progress administration which provided work from millions of

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needy americans Roosevelt also pushed through regulations like the nineteen

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thirty three banking act that sought to rectify the structural

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issues leading to the great depression Around nineteen thirty five

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roosevelt launched another policy initiative known as the second new

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deal a big part of the second round was making

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permanent the first batch of temporary new deal measures but

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the biggest part of it by far was the social

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security act which created an american institution that remains a

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key political issue today Of course not everyone loved the

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new deal In particular conservative politicians thought that government spending

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wouldn't stop the crisis and they weren't entirely wrong Although

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the new deal stopped the flow of blood caused by

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the great depression it ultimately didn't solve the crisis And

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of course others argue that roosevelt's new deal policies weren't

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progressive enough For instance advocates for socialism wanted more government

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Programs for the working class Either way unemployment remained brutally

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high throughout the thirties and it wasn't until roosevelt's third

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term and the mobilization of u s forces in world

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war two that the country finally reached full employment Of

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course war is in a way a government sponsored economic

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initiative which sort of proves roosevelt right Then again there

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are plenty of valid arguments to the contrary worth examining

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notice that we've hardly talked about the actual causes of

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the great depression which is because they're kind of hard

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to nail down legendary british economist John maynard keane's champion

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1 major interpretation of the crisis in nineteen thirty six

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is general theory of employment interest and money He suggested

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that the great depression had been caused by something called

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a failure of aggregate demand which basically means that we

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had enough stuff just not the ability to buy it

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In this interpretation widespread unemployment and economic stagnation were the

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new normal a situation that might persist indefinitely in order

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to get the economy moving again Keane's argued that the

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government should increase spending even if it means running a

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significant budget deficit As you can tell this philosophy was

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influential on the new deal and similar stimulus programs In

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contrast economies of the lays a fair tradition which emphasizes

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the wisdom of free markets argued that the stock market

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crash was a natural reaction to the decadence of the

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nineteen twenties and would naturally revert back to a normal

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state of affairs after a quick recalibration decades later a

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third interpretation of the great depression would be championed by

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milton friedman and anna schwartz In their nineteen sixty three

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book a monetary history of the united states Freed minute

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schwartz We're big believers of the free market similar to

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the lays a fair economists of the nineteen thirties but

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their analysis differed on a few key points To them

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The crash was caused by the policies of the federal

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reserve as well as individuals hoarding of cash After the

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bank started going bad This reduced the amount of money

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circulating in the economy and kicked the crisis into top

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year So who's right Well the real answer might be

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all of the above Each of these analyses touch on

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valid ideas but none of them tell a complete story

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on their own Instead we have to look at all

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Of them to gain a fully rounded view of the

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situation Besides its impact on the economy the great depression

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completely changed american society The crisis had the effect of

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radicalizing americans and pushing them towards extreme positions Some became

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supporters of charles e coughlin a catholic priest who was

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launched into national stardom by his radio show which was

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a novel thing at the time Coughlin was initial supporter

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of roosevelt's new deal but he eventually swung hard to

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the right and threw his support behind the fascist movement

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in europe Strange as it sounds in hindsight many americans

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at the time look to these authoritarian states for inspiration

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in turning around their economy Another example is louisiana governor

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huey p long who happened to be buddies with coughlin

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Long too was launched into national prominence though he did

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it through a simple slogans share our wealth He even

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ran against roosevelt as a democrat in nineteen thirty six

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by arguing that the new deal was too conservative So

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why are we spending so much time talking about the

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great depression when we all really want to talk about

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is the grapes of wrath Well because it's important background

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Information Although the novel isn't exactly about the great depression

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the economic crisis hangs heavy over its plot If you

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remember the joad family left home because of the dust

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bowl a fearsome weather phenomenon primarily in the oklahoma area

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naturally they hope to find work elsewhere But this little

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thing called the great depression is wreaking havoc on the

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rest of the country As a result the jobs are

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rarely able to find jobs for themselves and when they

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dio conditions are far from pretty We see further impact

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of the great depression in the local residents of these

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regions who being an economic hardship themselves hate interlopers like

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the jobs stealing their jobs The joes even spent some

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time at a government operated work camp which eludes the

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new deal efforts made by president roosevelt there's also a

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strain of anti bank sentiment in the novel At one

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point a bank is described as a monster that can't

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stop growing or it will die whether you agree with

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this assessment or not It's clear that steinbeck's mistrust of

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financial institutions is based on his view of the great

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depression Unsurprisingly the great depression figured prominently in steinbeck's personal

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Life in fact he was just starting his career as

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a writer when the depression hit in thirty four he

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spent time with two labor organizers in california who gave

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him insight into the worker's rights movement Two years later

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he traveled with a group of okies who had fled

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the dust bowl just like joe ds and wrote a

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newspaper article about them All in all steinbeck spent a

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lot of time with poor folks who were crushed by

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the great depression which helped solidify his own left leaning

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political views Is it a coincident that this time was

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also steinbeck's most productive time as an author Nah thirty

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sawed the publication of steinbeck's most beloved books like tortilla

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flat of mice and men and the grapes of wrath

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of course to different extents and too varied purposes All

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of these novels are shaped by steinbeck's personal encounters with

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the great depression See what i mean when i said

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that economic me real bomber even though it makes us

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sad there are some really important lessons to learn about

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the great depression First the depression was one of the

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defining events of the twentieth century just as much as

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any world war or cold one for that matter Because

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of this the great depression shaped the world we live

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in today even if we don't realize it After all

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no depression means no social security And why is this

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relevant for our purposes It's Because understanding the great depression

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is crucial to understanding the grapes of wrath Not doing

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so would be like watching a star wars movie without

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knowing what the forces Finally the great depression helped shape

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john steinbeck's political views which in turn helps us better

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understand his fiction Which brings us to the end of

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today's lesson I hope you've thought about how financial downturns 00:10:48.514 --> [endTime] makes us dollar bills feel it's depressing just depressing

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