The Great Depression Essential Question: WHY did the Great Depression Happen? Objective: Students will examine vocabulary meanings to analyze arguments in a secondary source.

The Great Depression: an overview Synonym for Depression: Synonym for Great: Recession: When your neighbor loses his or her job Depression: When YOU lose your job Feeling of severe despondency and dejection; melancholy; misery; despondency; a long and severe recession in an economy or market; decline; downturn; indentation; crater; dip Very large and imposing; absolute; total; considerable; substantial; important; renowned; powerful; dominant; influential; formidable

Economic Vocabulary Consumer Price Index Deflation Depression As a Group Task: Use the dictionaries to look up the definitions of your assigned words. 2. Think of an example or put the definitions into your own words so that you remember the term Consumer Price Index Deflation Depression Inflation Nominal Gross Domestic Product (GDP) Real Gross Domestic Product (GDP) Unemployment

Inflation: Deflation: Deflation VS. Inflation Task: 1. Create a representation of each vocabulary term as a GROUP 2. Brainstorm the IMPACT of Inflation & Deflation on Americans Inflation: A sustained increase in the general price level Deflation: A sustained decrease in the general price level Calculated using the Consumer Price Index (CPI)

The Great Depression an Overview: by David C. Wheelock The Great Depression according to an expert…. Questions: Why should people study the Great Depression? Identify two causes of the Great Depression. Define Inflation – Does Wheelock’s definition match the class definition? Define Deflation – Does Wheelock’s definition match the class definition? Why are these two terms so important to Wheelock’s article? Vice President & Deputy Director of Research at the Federal Reserve Bank “The Depression was not a failure of capitalism or markets, but rather a failure of the Federal Reserve” http://www.youtube.com/watch?v=-60957NDkp8 What we learned from the Great depression

Causes of the Depression WHY did the Great Depression Happen? Hypothesis Supporting Evidence Undermining Evidence What are the weaknesses of this Hypothesis? Which of these causes do you think had the largest impact? Write a Thesis supporting your belief. (Thesis = Position + Argument 1, Argument 2, and Argument 3) ***Supporting Evidence***

How Great was the Great Depression Real output (GDP) fell 29% from 1929 to 1933 Unemployment increased to 25% of the labor force Consumer prices fell 25% and wholesale prices 32% 7,000 banks failed – many during ‘panics’ Number of banks fell from 25,000 in 1929 to 15,000 by 1914 Impact = loss of deposits  decline in expenditures Impact = Customer relationships broken  harder to borrow Impact = Money supply contraction  decline in spending Firms stopped investing in new buildings, equipment, etc  Bankruptcies increased as borrowers lacked the incomes to repay their debts

***Supporting Evidence*** Causes of the Depression How did the prosperity of the 1920s give way to the Great Depression? Causes of the Depression Banking system collapse Uneven distribution of wealth Easy Credit lending Stock speculation High Tariffs Which of these causes do you think had the largest impact? Write a Thesis supporting your belief. (Thesis = Position + Argument 1, Argument 2, and Argument 3) ***Supporting Evidence***

Americans face hard times How did the Great Depression affect the lives of urban and rural Americans? In Cities - Production cut backs in factories - Falling wages - Bread lines - Hoovervilles On Farms - Falling commodity prices starting in the 20s - Growing debt - Farm foreclosures - Drought - Migration - Repatriation (especially Mexican migrants) Both Unemployment Poverty Eviction

Hooverville

Dust Bowl

Modern Connections

Hoover’s Response Why did President Hoover’s Policies fail to solve the country’s economic crisis? Cautious Response Fails A. Hoover Tries Volunteerism 1. Calls on business leaders to maintain employment wages, and prices 2. Calls on wealthy individuals to give money to charity 3. Calls on local governments to provide jobs and relief B. Volunteerism Fails 1. Businesses cut wages and lay off workers 2. Local governments do not have the resources to provide jobs

II. More Activist Policies A. Hoover uses Federal resources 1. Creates the Reconstruction Finance Corporation 2. RFC provides government loans to big business and banks B. Trickle Down Economics Plan 1. Government Loans to large businesses will help them hire workers 2. Government loans to bankers will help them make loans to businesses 3. More businesses will lead to more employment 4. Greater employment will end depression C. Activist Polices Fail 1. Business do not use loans to hire workers 2. Some bankers do not loan to businesses 3. Unemployment remains high *Example of How America responded: Bonus Army - 43,000 marchers—17,000 World War I veterans, their families, and affiliated groups—who gathered in Washington, D.C., in 1932 to demand cash-payment of their promised WW1 bonuses. Hoover then ordered the army to clear the veterans' campsite Seen as evidence of how little the US gov’t cares about it’s citizens and ensures that Hoover loose the election to FDR

Hoover Vs. FDR Hoover’s Political Beliefs FDR’s Political Beliefs conservative Believes that any governmental control of the economy would end individualism and threaten freedom No government intervention Believes that government & business should work together (partnership and government & business) Government should serve all citizens Keynesian Economics: Government should intervene during an economic downturn. Government spending should increase. *adopted by FDR No other man in the US had a higher reputation than Hoover in the 1920s, and none rated lower in public esteem in the early 1930s. Was the reversal of public opinion justified? Should he be admired for the constancy of his beliefs, even under severe criticism?

Review! Terms Definition/ Significance… Great Depression Deflation CPI Inflation Real GDP Dust Bowl Hoover Dam Trickle Down Economics Tariff Volunteerism Downturn in prices The value of all goods and services produced in the US (adjusted value) A publics works project at odds with laissez faire policies Ecological disaster that forced many ‘Okies’ to migrate westward Severe downturn in the Economy resulted in high unemployment Ideas that loans to businesses/banks that would filter to all people A tax on imported goods Measures the change in the price of goods in the US An increase in prices Idea that Individuals & local gov’ts should provide social supports