The Great Depression was a severe global economic meltdown that happened in the decade that preceded the Second World War. The time of the recession differed from country to country, but it was from 1930 till late 1930s and mid 1940s in some countries. The second film in the Great Depression Series by PBS, The Road to Rock Bottom, critically looks at the problems that faced farmers in United States before and during the Great Depression. The film examines the predicament of farmers, agricultural workers and sharecroppers. The focus is on the effects of harsh environmental factors such as drought that reduced crop yield sending many homes without pay. The films also devote quality time the surplus agricultural products that flooded American markets during that time. The surplus resulted in sliding prices for agricultural produce that led to starvation, privation, homelessness and foreclosures (Fayer).
In the film, Charles Floyd (Pretty Boy) gains support from many impoverished people in America. Floyd was a robber he targeted banks and received support from many struggling farmers. Following this, many resented against the institutions that they believed caused the Great Depression. The documentary also pays attention to the fact that the federal government was unwilling and unable to devote more resources to save the struggling Americans. Unwillingness to support the impoverished by the federal government is attached to the then president Herbert Hoover, who believed that helping people would lead to dependency on the government. Individualism permeated both political parties then and hence helping devoting resources to help the people was out of the question. The film ends in a failed attempt by the Bonus Army to demand early payment of bonuses to army veterans. The attempt resulted in violence between the Bonus marchers and the Army (Fayer).
Franklin Delano Roosevelt (FDR) introduced the ‘New Deal” in 1931. The plan threw crowds that sought to benefit from the deal behind him. The new deal returned the optimism and confidence of the American people. FDR emphasized that if there was one thing that America could fear then was fear itself. Roosevelt determined that he was f=going to make changes that could effectively lift the crisis that faced the nation. On his first night as president, FDR ordered William Woodin, then Secretary of the Treasury, to come up with a crisis banking bill within five days. In some sense, the New Deal introduces some economic and social reforms that were common in European nations. Additionally, it led to the completion of a long trend towards the desertion from capitalism. One unique thing with the New Deal is the rated at which it accomplished what had taken other leaders so long (YouTube). The New Deal did it so quick. FDR administration weakly administered many reforms, most of which were hastily written. The government also did not interrupt or got entangled in public criticism and debate from and by the public. FDR administration used a policy in which the currency was moderately inflated resulting I an upward movement of the price of commodities and hence bringing some relief to debtors (Hardman).
The film, ‘Running with the Bulls’ by Hedrick Smith takes an incisive look at how a few millionaire Wall-Streeters make huge profits at the expense of the entire population. The film is based on a few single-minded individuals whose goals were to extract as much as possible money from companies. Such individuals took over companies regardless of what that meant to the business ethos, business communities and workers. The documentary depicts this where Michael Price and Albert J. Dunlap forced merger of Chemical and Chase Banks and made millions by cutting down wages, dismissing workers and downsizing businesses. Such people argued that they compelled corporate managers to bring high investor returns, capitalism, by their definition. Those who critiqued such high fliers noted that the whole nation did not benefit in any way from the booming market, but rather the rich are the ones who benefited (Smith, Running with the Bulls). The rich used the “cut-and-run technique’ according to Mr. Smith, that is, they really do not care about what happened to the public provided they made as many profits as possible for themselves. In a cautionary tale, Mr. Smith gives an account of Vlujet, a company that pushed the cost-cutting button more than it should have. The owners became favorites at the wall streets at the expense of safety, maintenance, experience and service. The accident killed 110 people in 1996, but by then, people had already ventured into new businesses (Goodman).
The documentary “Mind over Money” that brings into perspective two competing economic models which the documentary refers to as ‘behavioralist economics’ and ‘rationalist economics’. In rationalist economics, every individual has personal interests but considers the other people while pursuing them. Behavioralist economics, on the other hand, claim that human beings do not do things rationally, that is, with other people in mind. It claims that even in the pursuit of maximization of personal wealth, human beings make mistakes. The documentary aims at convincing viewers that the behavioralist is right. To prove this, film presents a $20 bill being auctioned. The bill is just worth $20, and nothing more to it. The bill is auctioned, and only the highest bidder takes the bill. However, the other bidders have to pay as well. As the auction happens, two bidders enter bidding at over $20. Such is not rational, but rather the fear to lose that bring bidding war to above $20. The film also devoted reasonable time to the present bias. That is if one was presented to an amount less that he/she would be given tomorrow, they would take a lesser amount today. Rationality does not hold here again because if it did, then one would wait for a larger sum. The documentary implies that the 2008 economic depression cannot be attached to anyone but rather to the kind of market we had. People lived on the assumption that the economy would support the future on itself that is what went wrong (BLANDCorporation).
Charles Ferguson’s “Inside Job” is split into five parts that systematically take concise views on the late 2000 economic meltdown. Between 2001 and 2007, there was a housing boom where investors borrowed so much money from the bank to the extent that the money borrowed versus bank assets ratio reached very high levels. In 2007, the Collateralized Debt Obligations (CDOs) collapsed, and banks found themselves with billions of dollars in the form CDOs, real estate and loans. However, the insolvent companies made a lot of money and walked with it untouched. However, reforms by the Obama government have been weak and ineffective. The United States of America has resisted the stringent guidelines on bank compensation that European nation impose (Casselman).
The PBS documentary “Money, Power, and Wall Street” tries to explain how the 2008 Great Depression that cost the world a warping $11 million happened (Blake). It all began with some young bankers making history by creating the credit default swap market in 1994. The group hoped that the derivative would help in risk management and stabilization of the financial system. It is this credit default swaps that in 2008 together with mortgage loans collapsed leading to the economic crisis. The documentary highlights the struggles that have been made, especially by the white house, to rescue the economy (Andrade). It brings into sight the key decisions, unexpected and hard collaborations between leaders of government and financial titans. With real estate business booming, banks squeezed the credit swap package up so that they could sell more home mortgage loans to fervent investors. Such actions loaded the system with a disastrous risk. The credit default swaps that should have stabilized the market but since the bundle was tweaked up, it brought the economy down by itself (Khan).
Some of the things that come clear from the six documentaries are the similarities and differences between the Great Depression and the 2008 economic depression. Speculation is one of the things that preceded the depressions. There were speculation on the stock market crash in 1929. Similarly, the speculation that the cost of housing would keep on rising led to the global meltdown. Buying on margin was also another thing that characterized both recessions. In the stock market, buyers could buy stock by only putting a 10% down. That is one could buy stock worth $1,000 with only $100. This created a lot of speculation in both periods and people even committed their lifetime savings to buy as much stock as possible. There was also bank crisis in both periods. Bothe recessions were preceded by panics that made most Americans withdraw their money from the banks. In the 2008 crisis, the banks failed yet again because of their dubious lending practices (McKenna).
However, there are also a striking difference between the two recession periods. In the Great Recession, the government was unwilling and unable to intervene and help the people. A four-year period of lassitude followed the great recession while the response was quick in responding to the recession. The government issued more than twelve stimulus packages that were aimed at jumpstarting the economy. United States experienced harsh drought in 1929 that rendered thousands upon thousands of farmlands useless (Croft Communications). Banks failure followed the drought. As for the 2008-2009 recession, America had not experienced any droughts in a very long time. The Second World War brought the Great Depression to an end. During the war, American exports in terms of supplies for war and ammunitions increase and hence more jobs were created. There was also no secure Federal Deposit Insurance in the Great Depression. In 2008, the government raised the level to $250,000 to caution the banks and reassure the American people (Edwards).
The six films bring into perspective how the Great Depression and the late 2000 depressions occurred. The two periods share quite a lot in common, and it is clear that we should have known more before the 2008 recession using the experiences of the Great Depression. The differences between the recessions, however, provide us with invaluable lessons and experience that we can use to prepare for if not prevent future recessions.
Works Cited
Andrade, M.,. Frontline’s “Money, Power & Wall Street”. 2 May 2012. Document. 2 August 2014.
Blake, M.,. Frontline: “Money, Power And Wall Street - Part 2. 1 May 2012. Document. 2 August 2014.
BLANDCorporation. Review of "Mind over money". 5 January 2013. Document. 1 November 2014.
Casselman, B.,. "Economisits Sets Rules on Ethics." Wall Street Journal (2012): 1-30. Document.
Croft Communications. The Great Depression: Then and Now. 2014. Document. 1 August 2014.
Edwards, M.,. How Does The Current Economic Recession Compare To The Great Depression? 11 August 2011. Text. 2 August 2014.
FRONTLINE. Money, Power & Wall Street. 24 April 2012. Film. 1 September 2014.
Goodman, W.,. TELEVISION REVIEW; Squeezing Companies For Profit. 17 January 1998. Text. 1 November 2014.
Hardman. The Great Depression and the New Deal. n.d. Document. 2 August 2014.
Khan, A.,. Bloomberg: "Money, Power & Wall Street" "Takes No Prisoners". 23 April 2012. Text. 2 November 2014.
McKenna, D.,. Comparing the Great Depression and the Global Crisis. 1 May 2013. Text. 2 November 2014.
NOVA. Mind Over Mind. n.d. Film. 1 September 2014.
Pickens, K.,. Finding Hope in the Great Depression. Washington: Adventure Works Press, 2014. Document.
Smith, H.,. Running with the Bulls. n.d. Text. 1 September 2014.
—. Running With The Bulls. 16 June 1998. Text. 2 August 2014.
The Road to Rock Bottom. Dir. Steve Fayer. Perf. Herbert Hoove, Dauglas McArthur Smedley darlington Butler. 1993. CD.
YouTube. Roosevelt and the New Deal Part 1. 23 Septermber 2011. Film. 1 November 2014. <https://www.youtube.com/watch?v=Deue0fLd1V4>.
