My Great Depression Dilemma

I have been tweeting out some of my thoughts about the Great Depression as that will be our next project. I think it is a very interesting and important time period to analyze. The causes, attempted “fixes”, and how it ended are debated among historians and economists. The viewpoints usually reflect the political bias of the historian/economist of conservative, liberal, or libertarian. The other fact that has increased its importance was the bursting of the stock market from the internet bubble and housing bubble in recent years. How to keep the economy running and the role of government in both the economy and regulation of business are very current topics that the Great Depression should shed light on.

The controversial nature of these topics make them perfect for PBL. I imagine essential questions such as:

  • What was the primary cause of the Great Depression? Defend it against other other lesser causes.
  • Why was the Great Depression global?
  • Were Hoover’s or Roosevelt’s policies effective? Did their policies shorten or extend the length of the Great Depression? Defend with specific examples and compare and contrast the presidents.
  • Was Hoover really laissez faire?
  • Is deficit government spending an effective policy during depressions and recessions?
  • How should we define Depression vs. Recession? How should we define when GD ended? by GNP? unemployment rates? financial levels of families? income gaps and disparities?
  • Is war “good” for an economy?
  • When did the Great Depression end and why? New Deal vs. start of WWII vs. end of WWII vs. other?

But now let me share my struggles. First of all in order to give fair answers to most of these questions or even consider them one needs a background in economics. My students have not taken that class yet making many of these concepts very challenging for most of them. Also due to the challenge of the economics, many students also find them boring. On a personal note, although I have a solid math background and understand basic economics, I think I need a much deeper level of economics to give these topics justice. I mean these topics are so debated by experts that I feel it is difficult to answer these questions for myself.

That leads to my biggest problem with this topic. I am not afraid to teach or admit to students that I do not have it all figured out yet, but what I really need are high school level resources from the various viewpoints. A mixture of primary and secondary sources that explain the major economic theories, their biases, strengths, and weaknesses would be great. Of course textbooks (which we don’t have anyway) are not much help in this. I envision comparison charts that summarize the major viewpoints along with primary sources including data, political cartoons, quotes, etc. Then I could give the essential questions and resources to students and turn them loose to come up with their own opinions.

So anyone have suggestions on student friendly resources particularly defining the major economic views?

7 thoughts on “My Great Depression Dilemma

  1. Ed Jones

    Mike, I’m not sure that there are ‘answers’ to these questions; and if there were, I’m not sure figuring them out is how I want HS students to spend their time. That said, what a fascinating area for projects, so I do have a few thoughts.

    1) I would be thrilled if students merely learned these, and a few more, questions.

    2) Economics is highly overrated as a science. It’s not a science at the micro-level, and it gets much worse at the marketplace, national, and international levels.

    3) Is there time to learn about price curves? I’d be thrilled if every HS student had a basic understanding that demand may push a price up; supply may push a price down, and lots of examples about how that plays out (tulip mania, 2007 mortgage bubble, Alex Rodriquez); or that fixing prices pushes demand up and supply down (2013 urban low-skilled jobs).

    4) Psychology is always a (the?) major variable in the demand curve, and often in the supply curve.

    How long will the project run? What level, how many students? Are there standards which must be covered?

    I’d start with Paul Solomon’s “Making Sense” area on PBS, see if that turns up anything. Or the American Experience section.

    I have some resources here I’ll look through.

    And, if nothing else, tell the students their job is to prepare a project for next year! 🙂


  2. Michael Kaechele Post author


    The logistics: 3 week project with around 90 sophomores. Standards are the causes and consequences of the Great Depression and the New Deal. Our overall focus and driving questions are about Poverty. We challenged students to consider the causes of poverty and how to fix it. The questions I mention here would be under that greater umbrella.

    I made it sound like I want students to come up with answers to these, but what I really want is for them to struggle with the questions and realize how complicated economies are. One of my pet peeves is when people give credit or blame to a president for the economy like he controls it all. This supports the overall driving question that I want students to get past stereotypes that the poor are lazy or stupid, but realize that economies can cause poverty beyond individual’s control.

    Supply and demand is definitely a topic that most students understand from elementary school on. I have developed a simulation in Excel where students invest on margins in the stock market. I model the prices on the actual changes of history and those students who figure out how to “game” it get huge gains and then crash hard when the market falls. It helps students see the allure of the rising market and how dangerous it is.

    You point about psychology is very interesting to me. It is part of my opinion about the length and end of the Great Depression. It seems to me that people were “stuck” in a negative, no risk mindset during the Great Depression that discouraged them from taking steps that would improve things. After WWII people were much more optimistic and were able to move from a survival mindset to a consumer mindset. Just my 2 cents.

    Thanks for the insights!

  3. Bill

    I’m interested in your paragraph on psychology in your reply to Ed, Mike. It wasn’t just that people were stuck in negative mindset during the 30s, they were trapped in a deflationary spiral. It made economic sense to avoid risk, as buying something today that would cost less tomorrow was the sensible thing to do. That of course reduced demand, which kept businesses from investing and employing – indeed it led to more layoffs. It was the massive government spending during the war that caused factories to reopen and employment to rise. After the war, continued gov spending (at least after the negative impacts of retracting it immediately after the war ended) kept the factories open and the workforce expanding as industry transitioned back to consumer production from war production (which of course also continued as the Red Menace replace Nazism as the national enemy).

    1. Michael Kaechele Post author

      I don’t disagree with any of what you say, but when did the deflation end? I think what you describe was true of early 30’s but after awhile so many Americans were in such dire poverty that they had no choice to make purchases because they had little or no money.

      My thoughts are that the businesses/people who did have any discretionary funds were stuck in such a long cycle of despair that they hoarded their money rather than use it and stimulate the economy. As year after year of the Great Depression wore on people had to wonder if it would ever get better. The hoarding is the psychological effect of the Great Depression that many of this generation took to their grave. I would argue that it took a momentous shift, i.e. the victory of WWII over Hitler and the Nazis to change the average American psyche.

      I admit that this is a ton of opinion and speculation rattling around in my head right now and I can’t really back it up with any data.

  4. Bill

    The dollar didn’t recover its 1929 purchasing power until 1943. The Dow Jones Industrial Average didn’t recover its 1929 value until 1952.

  5. Bill

    GDP recovered to its 1929 level in 1941.

    While it is true that many people had no choice but to spend what they had during the 30s just to survive, that spending was not enough to pull the economy out of depression. And, I agree, the mental scars left on those who survived lasted a lifetime. But the New Deal/Keynesian policies of government as spender of last resort and economic regulator worked to keep the economy growing and out of depression for decades. Only when we forgot those lessons and became to listen to the anti-new deal scolds did we create again the boom/bust cycle that marked the US economy in the 19th and early 20th centuries.

    1. Michael Kaechele Post author

      I think Keynesian principles struggled to deal with the globalization shift of the the 70’s and 80’s. I don’t claim to have the answers but I am not a solid proponent of any one theory.

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