The Globe by wuyunqing

VIEWS: 5 PAGES: 54

									What is this?
Cabbage Patch Kids
- 1982 to 1986: declared most popular doll in history of toys
- In1986, a company named „Coleco‟ made over 600 million dollars on
these things!
- People waited in lines at the toy store for days to get one
- “The Cabbage Patch Kids craze will never die!” Time Magazine, 1986
 Cabbage Patch Kid




                                                $ 590 million dollars cash
COLECO GOES UNDER!
Coleco decides to
manufacture 90 million dolls
in 1987

- Less than 1 million dolls
were sold that year….

- People got bored and
moved on to purchasing
other toys like action figures

- Ghostbusters and Ninja
Turtles were in popular
demand

-Coleco files for bankruptcy
in 1988
OOPS!!!!
WHAT IS A FAD??

DEFINITION: “an interest
followed with exaggerated zeal”
or “an item that is taken up with
great enthusiasm for a brief
period of time”
YES, THIS IS A SERIOUS QUESTION!


     How does the fiasco of Cabbage
     Patch Kids dolls in the 1980s
     compare to the Stock Market Crash
     of 1929?
             The                                      Globe.
VOLUME XVI         TORONTO, CANADA, TUESDAY, OCTOBER 29, 1929   PAGE A1




              THE GREAT DEPRESSION                                  WALL
                                                                   STREET
                                                                   CRASH!

     V.
                                                                 1929 - 1939



                                                                   BLACK
                                                                  TUESDAY
                                                                     IN
                                                                  AMERICA
     V.
            Economics in 1920s
                   Demand for
                   Goods

  Higher
  Purchasing                     Higher Production
  Power




                                Greater Sales
Greater Profits

                  Higher
                  Employment
            Economics in 1930s
                   Demand for
                   Goods

  Lower
  Purchasing                     Lower Production
  Power




                                Lower Sales
Lower Profits

                 Higher
                 Unemployment
OOPS!!!!
           THE GREAT DEPRESSION
PAGE A2                                                          Tuesday, October 29, 1929




    •     DEFINITION: The Great Depression was a severe and prolonged economic
          downturn. [1929 - 1939]

    •     The Great Depression

    •     „Roaring Twenties‟
          Q: “Stock Market prices have reached what looks like a permanently high
          plateau.” -- Yale economist Irving Fisher 1929, two weeks before the market
          collapsed.


    •     OCTOBER 29, 1929

                WALL STREET & BLACK TUESDAY
           THE GREAT DEPRESSION
PAGE A3                                                         Tuesday, October 29, 1929




    •     Canada argued to be the worst hit country in the Western World (TRADE)

                “The grasshoppers came in clouds…”
                         -- from an eyewitness account of the Great Depression



    •     Changed economic world for eternity

    •     A domino affect of crises; one after another. (WWI)


    •     STOCKS: shares of ownership in a company held by investors
                  [grow and decline with the economy]
          THE GREAT DEPRESSION
PAGE A4                                                           Tuesday, October 29, 1929


  In the years after the First   and fell. The market began          worthless stock. Many
World War, the economy           slipping seriously on October       companies did not survive
boomed. People were racing       24 „Black Thursday‟. People         the stock market crash.
to buy stocks as a way to        panicked, but the next day          Thousands of people were
invest for the future. Many      the market rallied a little.        left unemployed as their
investors even borrowed          Then on Monday stocks fell          jobs     disappeared   in
money so they could buy          even more, and the next day         company
stocks, since they expected      Black Tuesday, was even             bankruptcies.        The
their value to rise. At the      worse than Black Thursday           1920s had been a time of
beginning of 1929, the stock     had been.                           wealth and luxury for
market looked strong. In                                             many, but that time was
                                  In only a few hours,
September, stocks hit an all-                                        over. The widespread
                                 thousands of people had lost
time high.                                                           hardships of the Great
                                 their entire life savings, and
                                                                     Depression had only just
 Then the first signs of         many were in debt for the
                                                                     started.
trouble began. Throughout        money they had borrowed to
the early fall, stocks rose      buy now-
          THE GREAT DEPRESSION
PAGE A5                        Tuesday, October 29, 1929




                     • Roaring 20‟s at Highest Peak


                     • Black Tuesday: October 29
                                     [shows drastic
                     decline]

                     • Short Recovery


                     • The Bottom / „Height of Depression‟
                     [1932]
          THE GREAT DEPRESSION
PAGE A6                                                        Tuesday, October 29, 1929




 •   Between the prosperous Roaring Twenties and WWII


 •   Arguably most significant 10 years in Canadian economic history


 •   Watershed period that hurt but then laid groundwork for transformation of country


 •   Dirty Thirties decade of social and economic crisis - led to abandonment of old
     economic and social ideas & limited role of state


 •   Old ideas replaced by new economic, social & political model which emphasized
     expansion of state responsibility for economy & for social welfare.
          THE GREAT DEPRESSION
PAGE A7                                        Tuesday, October 29, 1929



          INDEX

  B.. ... The Causes
  C.. ... The Damage
  D.. ... Old Ideas
  E.. ... New Ideas
  F.. ... The Transformation [Keynesian Economics]
  G.. ... Influence of World War II
                            THE CAUSES
PAGE B1                                                        Tuesday, October 29, 1929




    •     Misdistribution of wealth in 1920‟s



    •     World War I: Major impact



    •     US loans between economies is the basis of the depression [KEY]



    •     Gambling in stock market in „20s highly encouraged
                            THE CAUSES
PAGE B2                                                        Tuesday, October 29, 1929




    •     High tariffs placed on goods [following Black Tuesday]



    •     Drought hits North America in 1930: Affects Trade.



    •     Market Crash + Great Loss of Money + Companies because could not
          survive crash + Employment = CAUSE of DEPRESSION ITSELF
                           THE CAUSES
PAGE B3                                                     Tuesday, October 29, 1929



                                                                         Wall Street
                                                                         Black Tuesday
                                                                         October 29
                                                                         1929




          Black Thursday: October 24, 1929




                               Black Monday:
                               October 28, 1929



                                                  Drought hit North America in 1930s.
                               THE CAUSES
PAGE B4                                                            Tuesday, October 29, 1929



           TOP 10 CAUSES SUMMARIZED                 [take note]


    •     World War I Influence


    •     Too few people with too much money [35% of personal income going to 5% of the people]


    •     Too many could only purchase on credit


    •     Bad management = bankruptcy [ex. overspending & maldistribution]


    •     Drought Conditions
                               THE CAUSES
PAGE B5                                                                   Tuesday, October 29, 1929



           TOP 10 CAUSES SUMMARIZED                     [take note]


    •     1920‟s false economic confidence: “End of an Era”


    •     Stockbrokers encouraged gambling in stock market


    •     Banks made bad loans so people could invest in stock market


    •     High tariffs killed industries because no foreign competition


    •     After: Lack of demand for goods meant thousands of workers laid off
          = reason to unemployment
          THE CAUSES
PAGE B6            Tuesday, October 29, 1929
THE DUST BOWL
Palliser‟s Triangle: The Breadbasket of
                 Canada
                     Dust Bowl Test Notes
-   Took place in Canadian Prairies the
    mid United States between 1930 to 1938

-   Massive drought took place in Palliser‟s
    Triangle, no vegetation survived

-   Top soil was blown into the air creating
    large dust clouds which had the
    potential to suffocate farmers and their
    families

-   Grasshoppers infested what ever crops
    grew in moderate harvest seasons

-   “Wheat Rust” + Drought + Dust +
    Grasshoppers destroyed the Canadian
    wheat industry

-   Thousands of families simply
    abandoned their farms altogether
        Catalyst? What’s that?
 PAGE C1                                      Tuesday, October 29, 1929

CANADA AND THE GREAT DEPRESSION [cont’d C1]




         • Catalyst: (something that causes an
           important event to happen) "the invasion
           acted as a catalyst to unite the country"

         Historians before the 1900s., focused on
          creating some sort of “String Theory” or
          “Single Cause” theory to simplify the
          complexities of historical occurrences.
String Theory History: Links events together to paint a
picture holistic picture of a major event

Single Cause Theory: A single occurrence is the reason
another, much more catastrophic historical event happens

- “Trigger History” is when an historian tries to boil down an
event to one single cause (thus puling the trigger of the event)

For example: “The Great Depression would not have occurred
if the Stock Exchange never collapsed in 1929”

“Now, it is your job to debate this….
                           THE DAMAGE
PAGE C1                                                           Tuesday, October 29, 1929



          CANADA AND THE GREAT DEPRESSION


    •     TRADE



    •     Drought: influence upon trade  destroyed most trade.

                         “…the breadbasket was now a dustbowl.”



    •     Toronto Stock Exchange Crash
                                   THE DAMAGE
PAGE C2                                                                           Tuesday, October 29, 1929

CANADA AND THE GREAT DEPRESSION [cont’d C1]


      MACKENZIE KING                                                                   R.B. BENNETT
      LIBERAL                                                                          CONSERVATIVE

•    10th PM of Canada                                         •   11th PM of Canada

•    “…faced Depression seemingly                              •   1 view: Aggressive, hard-working
     uncomprehendingly.”                                           military lawyer from Calgary
                                              WILLIAM LYON                                                    RICHARD
•    Looked at economic crisis as a           MACKENZIE KING   •   Another view: „erratic, emotional,         BEDFORD
                                                                                                              BENNETT
     political problem & not realistically                         insensitive, conceited & self-obsessed‟


•    In power from 1921 - 1930:                                •   Bad: The Plan [Raise tariffs]
     Beat out by conservatives                                            “…blast our way into the markets of the
                                                                   world or perish in attempt.”
•    Reclaimed office in 1935:
     After worst of Depression                                 •   Creative leader in some areas
                            THE DAMAGE
PAGE C3                                                           Tuesday, October 29, 1929



          STATISTICS IN CANADA

    •     Overall income fell 50%

    •     Imports = 55%

    •     Exports = 25%

    •     Jobless rate went from 4% in 1920s to a 27%

    •     Out of 10 million Canadians, 2 million were living on relief handouts
                                   THE DAMAGE
PAGE C4                                                                                    Tuesday, October 29, 1929


                                        Dorthia Lange‟s Migrant
                                        Mother depicts destitute
                                        pea pickers in California,
                                        centering on Florence
                                        Owens Thompson, a
                                        mother of 7 children, age
                                        32. Picture taken March
                                        1933 (the height of the
                                        depression).


                                                                     Typical urban areas in 1930 once Depression begins to set




          Commonly posted signs along cities for the unemployed
                                      OLD IDEAS
PAGE D1                                                                        Tuesday, October 29, 1929



           AMERICA: PRESIDENT HOOVER                       [republican]


    * Effort radically minimal

    •     In office 1929 - 1933
                                                                                                      HERBERT HOOVER


    •     Laissez-faire thinker
           –   “Doing nothing and letting the economy come back on its own.” [Historian Michael Bliss]


    •     Almost destroyed America‟s economy - could possibly have gone global
           –   Giving banks more money so they could loan more
           –   No help to poor and unemployed
           –   Balancing budget and cutting spending
           –   Cutting on taxes on corporations and rich to encourage investment (made rich richer)
                                OLD IDEAS
PAGE D2                                                           Tuesday, October 29, 1929



           CANADA’S PRIME MINISTER: R.B. Bennett [conservative]


    * „The Plan‟

    •     Created idea of keeping tariffs high [very bad]
                                                                                       RICHARD BEDFORD
                                                                                       BENNETT

    •     Relief Camp Protest: On-to-Ottawa Trek

    •     Compared to Hoover on bad terms: SAME STANDPOINT


                                          “One of the greatest assests any man or woman
                                          can have on entering life’s struggle is poverty.”
                                                             - R.B. Bennett at height of Great Depression
                                OLD IDEAS
PAGE D3                                                          Tuesday, October 29, 1929



           1929 - 1932 STATISTICS BETWEEN CANADA AND AMERICA


    •     Capital investment dropped from $10 billion to $1 billion

    •     Corporate profits dropped from $8.5 billion to $3.5 billion

    •     FIVE THOUSAND banks went bankrupt

    •     Banks lost over 3 BILLION of people‟s life savings

    •     Production dropped over 50 percent
                               OLD IDEAS
PAGE D4                                                        Tuesday, October 29, 1929



           1929 - 1932 STATISTICS BETWEEN CANADA AND AMERICA


    •     Bankruptcies increased to $100 000 YEARLY

    •     Unemployment rose from 4 million (1930) to over 11 million (1932)

    •     Average employee had wages cut 60 percent

    •     Farm income dropped from $12 billion to $5 billion
          OLD IDEAS
PAGE D5               Tuesday, October 29, 1929
          OLD IDEAS
PAGE D6               Tuesday, October 29, 1929
                               OLD IDEAS
PAGE D7                                                       Tuesday, October 29, 1929




          WALL STREET GOES BANKRUPT!

    * The old belief that caused and damaged the economy


           The leaders, both           This was based on      have been entirely there
          Bennett and Hoover,       their beliefs that that   fault, but they were the
          were not fit to lead      saving their money        figures who created the
          their countries through   was key and the right     depth of the
          such a time as their      way to handle the         depression itself.
          theories crushed the      economic crash. The
          economy and only          crashs in New York
          worsened it.              and Toronto may not
                                NEW IDEAS
PAGE E1                                                               Tuesday, October 29, 1929




    •     New Leader = New Deal


    •     Franklin Delano Roosevelt [FDR]

           – Elected president 1932 - 1945    (4 terms in office)   [until death]

           – Created the New Deal     [mainly elected because of this promise]

           – Biggest change brought: the willingness to take action vs. Hoover

           – Began the decline of the Great Depression
                                NEW IDEAS
PAGE E2                                                            Tuesday, October 29, 1929



           THE NEW DEAL

    •     GOALS:
           – giving work (relief) to unemployed
           – reform of business and financial practices
           – recovery of economy during Great Depression

    •     First New Deal (1933)
           – Aimed at short term recovery for all groups
                                                                         Franklin Delano Roosevelt
                                                                         32nd President of the United States
    •     Second New Deal (1935 - 1936)
           – ex. Labour Union Support
                                                       “The first hundred days in office saw more
                                                       progress than there had been in 12 years.”
                               NEW IDEAS
PAGE E3                                                         Tuesday, October 29, 1929



           THE NEW DEAL
           Overall impact of FDR

    •     New bank bill passed Congress in eight hours

    •     Bill legalized wine & beer (end of prohibition)


    •     AAA Act [Agricultural Adjustment Act]
                                                                      Franklin Delano Roosevelt
                                                                      32nd President of the United States

    •     NRA & WPA(Works Progress Administration           )
    •     Cheap mortage money was made available to encourage home building
                               NEW IDEAS
PAGE E4                                                           Tuesday, October 29, 1929




           NATIONAL RECOVERY ACT [NRA]

    •     Allowed industries to cooperate to improve efficiency and stabilize prices

    •     Gave unions right to organize and bargain

    •     Set minumum wages and maximum hours

    •     Abolished most child labour and set basic health and safety standards
                                NEW IDEAS
PAGE E5                                                          Tuesday, October 29, 1929




           NATIONAL RECOVERY ACT [NRA]

    •     Set up Public Works Administration with $3.5 billion to build public works
           – dams, roads, buildings


    •     Created Civilian Conservation Corps to employ 18 - 25 year old men to
          protect national environment

    •     Set up Tennessee Valley Authority to build damns and hydroelectric-
          generating stations in one of the poorest areas of the United States
          NEW IDEAS
PAGE E6           Tuesday, October 29, 1929
          NEW IDEAS
PAGE E7           Tuesday, October 29, 1929
                  TRANSFORMATION
PAGE F1                                                          Tuesday, October 29, 1929



           KEYNESIAN ECONOMICS

    •     John Maynard Keynes     [author: General Theory of Employment]


    •     Influenced FDR‟s New Deal policy


    •     Basic Theory
           – Downswing + monetary policy = increased supply of money and economic rise


    •     Theoretical Revolution oppose to a Policy Revolution
                   TRANSFORMATION
PAGE F2                                                            Tuesday, October 29, 1929



           MONETARY POLICY

    •     Process where the government or „central bank‟ of a country controls:


           1.   Supply of Money

           2.   Availability of money

           3.   Cost of money or rate of interest

    •     “Keynes‟ main points (above) in order to attain a set of objectives oriented towards
          the growth and stability of the economy.” -- Donald Creighton
                   TRANSFORMATION
PAGE F3                                                               Tuesday, October 29, 1929



           FISCAL POLICY

    •     Refers to the overall effect of the budget outcome on economic activity


    •     Deals with the distribution of taxes and the „generosity of allowances‟
           – Influence the direction of the economy through changes in government taxes, or through
             some spending

    •     Spend more money will return economy into upswing
                TRANSFORMATION
PAGE F4                                                     Tuesday, October 29, 1929



          FISCAL POLICY

          Overall impact on variables of economy:



               Aggregate demand and level of economy activity


               Pattern of resource (trade) increase


               Distribution of income
                   TRANSFORMATION
PAGE F5                                             Tuesday, October 29, 1929



           KEYNESIAN ECONOMICS

           Keynes’ main arguments for causes:

    •     Wages & spending

    •     Excessive saving


           Keynes’ main arguments for solution:
    •     Reduction in interest rates

    •     Government investment in infrastructure
                                             Influence of

                            WORLD WAR II
PAGE G1                                                       Tuesday, October 29, 1929




    •     Final exit out of the Depression



    •     Proved John Keynes‟ Theory



    •     Began with New Deal



    •     Reaction to WWII resulted from New Deal and agreement to large spending
                                           Influence of

                            WORLD WAR II
PAGE G2                                                            Tuesday, October 29, 1929




    •     Before entering finally rejected Hoover‟s laissez-faire belief
                [the economy needed help]


    • HUGE AMOUNTS OF GOVERNMENT SPENDING ON WAR

             MATERIALS BROUGHT ECONOMY BACK TO 1929
          LEVELS
                            “It can only be speculated how far FDR‟s New Deal took the
                            economy since, ironically, the final exit from the Depression came as
                            a result of foreign conflict and outbreak of WWII.”

                                                          -- Amity Shlaes [the Forgotten Man]
                                           Influence of

                          WORLD WAR II
PAGE G3                                                          Tuesday, October 29, 1929



          Overall impact after WWII leads out of Depression


          Laissez-faire belief abolished


          4.8 billion in relief (welfare) money was given to aid those still unemployed


          Social Security Act was set up as a nationwide pension plan

          Banking Act passed to give government total control of money supply
          COMICS
PAGE H1            Tuesday, October 29, 1929

								
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