THE GREAT DEPRESSION

AGENDA Homework: Read and take notes on Ch 22 Sec 1 (p 670- 677) Debrief widget game Great Depression – what caused it? Homework: Read and take notes on Ch 22 Sec 1 (p 670- 677)

Debrief What tension did you experience during the game? Who was responsible for the “crisis of overproduction”? Why didn’t anyone stand up and say “this is crazy. We’re all going to lose. Let’s cooperate on this and not make as many widgets”? Is there something deeper here? What about the rules of the game itself? How were the rules responsible for the crisis of overproduction? You’re rewarded for your profit, but the more widgets in production, the closer you are to the crisis of overproduction

Debrief In the real world, let’s say a business wants to buy machine model #4 from the beginning, but doesn’t have the money to do so. What would they do? You’re rewarded for your profit, but the more widgets in production, the closer you are to the crisis of overproduction

Debrief Let’s go back to your widget factory. You’re all about increasing your profit, but you can’t do that through reducing labor costs, because you already are making your employees work faster and longer for little pay. Imagine for a second if every industry paid their workers this badly. What if, for the sake of profit, a company cuts wages of its workers, so that they don’t have enough money to get by. What options do workers have? If you cannot afford something, but you need it, what would you do? You’re rewarded for your profit, but the more widgets in production, the closer you are to the crisis of overproduction

HOW DID THE GREAT DEPRESSION BEGIN? The new installment plans allowed people to buy on credit If you don’t have the money, the banks will loan it to you; you only need to repay the banks But, if you can’t pay off your credit… you go into debt And the banks suffer And everything suffers And the stock market collapses And people are worried about losing money So they withdraw all of their money from the banks But the banks have no money because everyone’s in debt and no one is paying off their credit And everything falls apart.

QUICK DISCUSSION Buying on credit is a new idea in the States. What possible problems might that lead to?

Let’s relate this to the real world… Why do so many credit card companies give away free points or airline miles or cash back? Did you know that the average credit card debt per person in the USA is $16,000?

QUICK ACTIVITY

Causes of the Great Depression Through some text analysis! Textbook. Worksheet. Work on supporting those topic sentences with evidence from the text Use that evidence to explain how that was a cause of the GD