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Hoover and the Great Depression · Saberian History Lectures

0:00
So today we are going to be talking about the Great Depression and the New Deal in the United States.
0:08
The Great Depression is an economic calamity that lasted almost, depending on which historians you asked, lasted about a decade.
0:22
Some historians have it longer than a decade. And so some historians have it from 1929 to 1939.
0:35
Others will have it go until 1941 with America's entry into the Second World War.
0:41
Some economic historians even don't count the end of the depression to actually be into the late 1940s, early 1950s with the post-war economic boom.
0:51
So you have, depending on who you're asking, different people ending at different places.
0:58
So, in time. But most historians have the Great Depression beginning in 1929, and I'm going to get into why.
1:09
Okay. So we're going to analyze the major causes of the Great Depression, its impacts, and the rise of the New Deal.
1:16
So let me see if I can make you understand this correctly.
1:22
The calamity of the Great Depression and the human costs that it took out or withdrew from American life forever changed the relationship of the citizen to the nation state in this country.
1:42
You are still feeling the full ramifications.
1:47
It changed the lives of your great grandparents, your grandparents, your parents, and you are still wearing the chains that were forged out of the Great Depression.
2:00
I tell you this because most of you believe that you were born free because you've been wearing those chains so long you don't even notice.
2:14
So, yeah.
2:18
Now, before I get into the chains themselves, let's get into the fire where they're forged.
2:26
So, first let's talk about what were the two driving factors behind the economic growth that occurred in the 1920s.
2:37
There were two additional sources of what?
2:45
Capital. What is capital?
2:50
We talked about this before.
2:54
Capital is your money that you can bring into industry.
3:00
You need capital to have industry.
3:03
So when I'm talking about capital, we talk about credit as a source of capital.
3:11
What other sources of capital do we have?
3:14
Cash, which into the 20th century, if you believe in sound money, cash could be specie, cash could be greenbacks, yes?
3:23
And again, a greenback note was originally saying this money exists somewhere in solid form.
3:34
So, for example, when you had a five dollar bill in the early 20th century, there was supposedly somewhere in a vault the equivalent amount in gold or silver.
3:47
And remember, a dollar was a troy ounce of silver.
3:53
What other source of capital do we have?
3:59
Well, mint is coin.
4:02
Stock.
4:05
You can trade stocks. Stocks, you would put money into a company, you would be given stock in the company,
4:12
and you would be paid a dividend depending on the profitability of the company, but it was a way of raising money, raising capital to build industries, yes?
4:21
Now, there is one other source of capital that is unleashed in the American economy during the administrations of harding and coolage
4:33
that were previously tied up in the Wilson administration.
4:42
Say it again?
4:44
Layaway is a type of credit.
4:52
Tax cuts.
4:54
You may recall from yesterday in the Harding administration and in the Coolidge administration, the top tax bracket goes from 73% down to 24%.
5:07
So money I'm not collecting in taxes, money I'm not taking out of the government in the form of taxes,
5:13
is money that is then invested or it is put into savings account and reissued out in the forms of loans.
5:19
Money that instead of being tied up by the government is being now put into the economy.
5:24
So you have these multiple new avenues of credit.
5:29
Now, cash and specie, they are constant.
5:34
I mean, how much gold and silver in the economy might change?
5:39
We talked about the money crisis of the 1880s, 1890s, and they found new silver mines out in Nevada, they found new gold mines in Africa,
5:48
and so that changed the value of gold and silver.
5:50
But again, these are relatively static.
5:52
And of course, stock had existed going back to the rise of the railroad, but people start speculating in stocks and we'll get to that in a moment.
5:58
But the two big ones are layaway credit and tax cuts.
6:03
The tax cuts allowed for a large amount of money to flow into the economy, precipitating economic growth.
6:10
Now, one of the things you run into with economic growth is you also run into one of the drawbacks of economic growth, which is inflation.
6:20
If you have too much money in the economy, what happens to the value of the money itself?
6:24
It goes down, which means all of a sudden goods and services become more expensive.
6:29
So just to give you an idea of how inflation works, the minimum wage used to be 10 cents an hour.
6:36
Can you buy anything with 10 cents nowadays?
6:39
No, you can't even make a phone call or mail a letter for 10 cents.
6:46
Actually, when I was at St. Philip's College, I found the old upright of an old payphone, a remnant of a long time past.
7:04
But anyway, so a couple of things start happening.
7:12
And before I get to those things that start happening, I want to sort of lay out a timeline to provide context to you.
7:18
So you might want to write this down and we'll just sort of fill in the blanks as we go along.
7:27
So we left off 1928. 1928, what happened? Who got elected?
7:37
Hoover. Herbert Hoover was elected president.
7:41
Now in American history, especially in the 20th century, there are two famous Hoovers.
7:45
Herbert Hoover, of course, the president, and then J. Edgar Hoover is the most storied of the FBI directors.
7:51
He will become a more prominent figure later.
7:56
I want to say he's the one who is the big communist hunter after A. Mitchell Palmer.
8:03
So 1928, Hoover is elected by a wide margin.
8:14
Who did Hoover run against? Al Smith.
8:21
What party was Hoover?
8:24
He was a Republican and Smith was a Democrat.
8:28
Hoover's electoral coalition holds together.
8:32
Hoover's electoral coalition is the Western farmers,
8:40
the business interests,
8:49
and some of the social progressives.
8:57
Traditionally, who have been the key members of the Democratic coalition,
9:01
the coalition that holds together the Democratic party?
9:05
Southern whites.
9:09
So if you're a Southern white Democrat by day, you might be a Klan member by night.
9:15
So I'm going to put that in parentheses because the Klan was the paramilitary wing of the Democratic party in the American South.
9:23
But was Al Smith a Klansman? Was Al Smith a Southerner?
9:30
Al Smith was a Catholic from New York.
9:33
And so part of his coalition is immigrants.
9:38
Al Smith is the first Roman Catholic to run for president of a major party.
9:47
Do Klansmen like Catholics? No.
9:50
What happens to the Democratic coalition? It breaks.
9:56
You break your coalition, guess what? You lose.
10:02
So these guys stayed home.
10:08
And does Smith have enough electoral votes with just the Northern immigrants to carry the day? No.
10:14
So Hoover, tag, he's it, wins by a large margin.
10:22
October 1929, the stock market crashes.
10:33
Just sort of a couple of things you need to keep in mind.
10:38
As part of the stock market crashing, the stock market loses 37% of its value.
10:43
By the way, who might no longer be in Hoover's coalition anymore if the stock market lost 37% of its value?
10:50
Business interest.
10:54
In the 1930s you also have the Dust Bowl, an economic catastrophe.
11:00
You have farmers getting pushed off their land as their mortgages are foreclosed.
11:05
The Dust Bowl is on the Great Plains.
11:08
Who might be unhappy about conditions in the American economy if the Great Plains become a desert?
11:18
I just had deja vu.
11:22
Right.
11:24
That could be true.
11:27
Now, the progressives are thinking perhaps the instruments of the administration are inappropriate to dealing with the task.
11:34
So who else might you think might no longer be for Herbert Hoover in the election cycle?
11:43
When's the next presidential election?
11:46
1932.
11:51
Franklin Delano Roosevelt is elected president in a landslide.
12:02
Hoover's coalition had abandoned him.
12:05
The economy was floundering, starvation abounded.
12:12
Now, here's the part that I want you to ponder.
12:20
Franklin Delano Roosevelt is a cousin of Teddy Roosevelt, albeit some generations removed.
12:31
Teddy Roosevelt is in, I want to say, the generation of Franklin's father.
12:36
The Dutch-moneyed family goes back in New York to when New York was New Amsterdam.
12:45
They are that type of political blue blood in New York politics.
12:50
Does that make sense?
12:53
Now, Franklin is a Democrat.
12:57
Was FDR a Democrat?
13:01
Or sorry, was Teddy Roosevelt a Democrat?
13:04
No, Teddy Roosevelt was a Republican, but they're both classified as progressive.
13:08
So remember, progressivism is an ideology that is not tied to a party.
13:14
And so FDR is the first Democratic president since Wilson.
13:23
Now, here's the thing.
13:25
Here's the man who comes in.
13:28
And I want you to pause for a moment because I'm about to sort of flip your world on its head.
13:33
Most American historiography paints Franklin Delano Roosevelt as a hero, as a reformer,
13:42
who led the nation out of the Depression, who led the nation through a Second World War.
13:51
Both of which are true statements.
13:56
This is also, and so let me twist your mind for a moment.
14:06
If I told you about a highly charismatic leader who could work the crowd into a frenzy,
14:16
who comes into power to the sound of mad, thunderous applause,
14:23
who changes every institution of government towards his own ends,
14:31
who has the press as his compliant lapdogs hiding his secrets,
14:40
who baits foreign governments, who leads a country into a war,
14:47
who inters thousands of American citizens without talking to the legislature,
14:54
and who sets in motion the creation of a weapon of mass destruction.
15:00
And I'm talking about the early 20th century.
15:04
Who do you think I'm talking about?
15:11
Yes, but you would think that this is a dictator associated with Hitler, Stalin, or Mussolini.
15:18
And he was in office till he died. He had to be carried out.
15:23
That's the difference between presidents and tyrants.
15:27
Presidents walk out of office. They walk away from power.
15:34
Franklin Delano Roosevelt had to be carried out. Not because of an assassin's bullet,
15:42
but rather the tooth of time and a disease that he had hidden from the American people.
15:48
He was paralyzed from the waist down.
15:51
And the press, paralyzed from the waist down, had a mistress,
15:55
and the press didn't report on any of this until ten years after he was dead.
16:00
You get the idea.
16:02
No, it's not that no one realized it. It's that no one would report it.
16:11
Now, let's go through the timeline for a moment.
16:14
1936, FDR is re-elected.
16:23
1940, FDR is re-elected.
16:33
That is designed as an English error to draw your attention to the remarkable fact.
16:38
Do some math. How many terms is that?
16:41
Three. He runs for an unprecedented third term because the crisis was still at hand.
16:50
By the way, he also tried to manipulate the structure of the Supreme Court to put his own cronies in there
16:55
to make sure his agenda got passed.
16:57
Because when you're a progressive, the ends justify the means.
17:03
Now, 1941, December, US declares war on Japan.
17:09
You have the attack on Pearl Harbor, December 7, 1941.
17:13
World War II starts.
17:18
1944, FDR is, and I'm running out of re's.
17:25
Re-elected to an unprecedented fourth term.
17:33
Four terms, yes. Had he lived, he would have been president for 16 years.
17:41
I'm just going to say fourth term because I don't want to write re-re-re-re-re.
17:45
1945, FDR dies. Truman fills out his term until 1948.
17:51
Truman was the vice president.
17:53
By the way, FDR cycles through a number of vice presidents, by the way.
17:56
Truman was either the third or the fourth.
17:59
So, 1945, FDR dies.
18:05
And President Truman is president by succession.
18:08
Now, some of you are a bit appalled because you've all grown up at a time
18:12
where we have had a constitutional amendment that prohibits a president
18:17
from serving more than two elected terms or more than ten years.
18:23
How would it be ten years?
18:26
Two years as vice president.
18:28
Two years, yeah, if you get it.
18:30
In other words, if, so for example, Lyndon Baines Johnson was president by succession in 1963,
18:39
serves as president from 1963 to 1964, is elected in 1964, is president from 1964 to 1968.
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If he wanted to run in 1968, which he didn't, he would have been permitted under the Constitution
18:50
to serve from 1968 to 1972.
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He chose not to.
18:57
But the custom had been eight years. Who set the custom?
19:01
George Washington.
19:03
Why?
19:05
Because he wanted to serve at third.
19:08
He wanted, some of the, Hamilton wanted him to serve in perpetuity.
19:13
Yeah, he wanted, he didn't want to be a king.
19:17
He did not want to be a king.
19:19
He thought also as a testimony to modesty that, and again,
19:23
Washington had the one virtue I think most American politicians lack, humility.
19:28
There is something about the tone that Washington set, the true power and true,
19:36
it's more than just true power.
19:38
It is a type of righteousness to say, sometimes you get to walk away and let the future take over.
19:48
I say that, that, I say that in the time of what will probably be the last baby boomer president.
19:59
What do I mean by the last baby boomer president?
20:02
Donald Trump and Hillary Clinton are only separated by about less than four years.
20:09
They would be the last baby boomer president.
20:12
I don't see, I mean, okay, unless Bernie Sanders gets it in like, you know, 2020,
20:17
but by then the man, the man would be running for the Methuselah Award as it is,
20:22
but you get the idea.
20:24
There is something else about term limits where you walk away and leave tomorrow
20:30
open for the future.
20:34
You get the idea.
20:38
We don't have people that walk away, do we?
20:43
Now, let me get back to the point.
20:45
Now, used to be custom, what's the difference between a custom and a law?
20:50
Law is enforced.
20:52
Right, and law is enforced, whereas custom is enforced by taboo, by other things,
20:58
but law, by God, you break it, there you go, you get the idea.
21:01
And so it was after the tyranny of FDR that you actually have a consensus,
21:07
both among the Republicans and among the Democrats who were terrified of this idea
21:13
of someone staying in office for a generation almost, if you're talking 20 years,
21:20
which 16 isn't that far.
21:26
They passed a constitutional amendment limiting the terms of presidents.
21:33
But we'll get back to the tyranny of FDR, that's for Monday.
21:39
Let's get to the setup.
21:42
Actually, let me give you a bit of a preview before we get to the setup.
21:51
You have, with the Roosevelt administration and the New Deal,
21:56
the government of the United States regulating the economy in ways
21:59
that had never been done before and many ways that have never been done since.
22:03
Now, one of the things I would say, everything down from Social Security
22:07
to the minimum wage to many of the social welfare benefits that we take for granted
22:12
and that we are paying for and that you will be paying for into your old age,
22:19
assuming the Republic lasts that long.
22:23
I'm talking about the origins of a country whose debt is now approaching $20 trillion
22:28
and a fair portion of that is the unfunded liabilities of Social Security
22:32
that has its start in the New Deal.
22:37
Who pays into Social Security?
22:40
You do, with your taxes, even you now, with your menial wage work.
22:45
This is the chain that is on you, that was foisted upon you by your parents
22:50
and by your grandparents and by, quite possibly, depending on age,
22:55
your great-grandparents because of the economic calamity of the 1930s.
23:00
Do you get it?
23:02
Now that we've gotten into the particulars of why we should care,
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let's get into how it got started.
23:08
So, it all begins with a crash.
23:15
A couple of things going on.
23:17
You have changes in the stock market, not the least of which is,
23:20
there are two types of investors.
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You have investors and you have speculators.
23:29
Now, there are some people who buy a stock and they hold on to the stock
23:39
because the stock pays them a dividend.
23:42
What is a dividend?
23:45
It is a quotient of the profits, quite literally, dividend, the thing divided, yes?
23:53
Some of you may know people who do that.
23:56
My wife, from her late grandmother, has stock in Hershey.
24:04
I mean, not many shares, but some.
24:07
Right, and so the Hershey stock, and I don't know if Disney is a dividend-paying stock,
24:12
you could tell me, but Hershey is a dividend-paying stock
24:15
and every three or four months she gets a dividend check from Hershey
24:20
and it's like 50 bucks.
24:22
I mean, it's good money, but you know, she's not looking to sell the stock.
24:27
She's not looking to see if it's up or down.
24:29
She likes getting the dividend because the dividend check is probably better than today's interest rates.
24:33
Now, it makes me doing the taxes kind of a pain in the butt
24:36
because I have to declare how much we're making the dividend
24:39
and it's one more bit of paper to go on the tax forms, but c'est la vie, right?
24:43
This is why we do TurboTax.
24:46
Then you have speculators.
24:50
They buy, they hold, and they sell.
24:57
Buy, hold, sell.
24:58
How many of you ever watch those shows like Flipping Houses shows?
25:01
You all ever watch that on HGTV?
25:04
What's the basic ethos?
25:06
You buy the house when it looks like crap, then what do you do?
25:09
You fix it up, and then you do what?
25:11
Add a profit, yes?
25:13
And that works, especially if you're in an up real estate market
25:17
where people are looking to buy, yes?
25:19
I would not try Flipping Houses in parts of Detroit.
25:22
Detroit has not actually had an appreciable growth in population.
25:25
They are not experiencing a housing shortage.
25:28
In fact, there are certain parts of the area that they are deliberately returning to wilderness.
25:34
Now, would San Antonio be a good market to be into real estate?
25:39
Yes, because people are moving in here.
25:41
This is part of the reason my property taxes are going up,
25:44
which some of you find quite annoying, don't worry, I'm with you.
25:47
But you get the idea.
25:49
Speculation works in an up market.
25:51
How does it work in a down market?
25:55
You try and cut your losses.
25:57
You try and cut your losses by selling, and if everyone else is trying to sell a stock,
26:02
what happens to the value of the stock?
26:04
It goes down precipitously.
26:07
So you have a surge in speculation, which kind of starts a chain reaction when the sell-off comes.
26:14
Now, one of the harbingers of the economic calamity was a slowing of auto sales.
26:21
Part of that was because of saturation of the market.
26:23
Part of that was because inflation from the 1920s led to a loss of disposable income.
26:29
So October 29, 1929, you have Black Tuesday, you have the crash.
26:35
You have 37% loss in the market's value.
26:38
That is more than a third in a day.
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Now, when they talk about an economic calamity, they say, XYZ, billions of dollars were lost in a day.
26:50
What does that tell you?
26:54
Was it ever really there?
26:59
You can't make that much disappear overnight unless it was never really there.
27:05
And what did I say?
27:06
What was one of the first sources of capital?
27:08
Starts with a C, not cash.
27:10
Credit. And what is credit?
27:15
Actually, it's a little bit, and this is why I say, because you can't think past your own word, and I never told you all this one.
27:21
You all use the word credit, yes?
27:24
How many of you have some type of credit at your disposal already?
27:29
And what is the root of the word credit?
27:31
It's a Latin word. Sarah, I'm going to put you on blast even for the tape.
27:35
What is the Latin root of credit?
27:38
Do you mean to take credit, trust, or what?
27:41
Well, what's first the Latin word?
27:43
It's a verb. Credo, which means I believe.
27:50
So when you're saying, I'm buying something on credit, that means the person that you bought it from believes that you're going to pay them back.
28:01
That means your entire system is built on what?
28:06
Trust. Not just honor, but...
28:11
No. Well, trust and interest.
28:16
Because what do they use as an instrument to ensure that you pay back if you don't pay back in a timely fashion?
28:22
They collect the interest. You get the idea.
28:27
So, credit. Now, which means, hang on, debit actually means from do, dare, de, di, datum, debo, to give.
28:40
There we go. All right.
28:43
Debit is it will be given, I believe.
28:47
Anyway, credit is again based on faith.
28:54
And when you have the market collapsing, what happened? Oh, ye of so little faith.
29:02
All right. So, 26,355 businesses shut down in 1930.
29:08
Oh, wait, there's more. Let's tell them what they've lost, Chuck.
29:13
Wage inequality. Okay, a couple of things going on.
29:17
You had the inflation in the 1920s. When you have two-thirds of your country living on subsistence,
29:23
what can they not buy?
29:27
If you have two-thirds of your population living on subsistence, they don't buy consumer goods, right?
29:33
They don't buy new cars.
29:35
And if they're not buying consumer goods, what happens to the people who are making consumer goods?
29:40
They're laid off.
29:41
No, they're laid off. They don't reduce the wages, they reduce the work.
29:47
And so let's say you're at the Westinghouse Toaster Plant and the orders for toasters stop coming in
29:53
because people are barely making enough money to get by and they're like, you know, I don't mind eating my bread cold.
29:58
What happens to you if you're the man at the Westinghouse Toaster Plant?
30:02
You don't have a job.
30:04
And if you don't have a job at the Westinghouse Toaster Plant, are you buying anything?
30:08
And you begin to see the chain reaction.
30:12
So it was all toasters?
30:14
Well, no, I'm using toasters as an example, and then after which you feel toast.
30:19
All right. So you have production cutbacks.
30:22
And then you have the government trying to prevent loss of American productivity to foreign markets.
30:30
So the government passes the Smoot-Hawley Tariff Act, which assigns a vicious tariff to imported goods into the United States.
30:37
But what is a tariff?
30:39
A tax on imports.
30:41
Two things happen. One, you have a taxation on imports.
30:45
Two, the other...huh?
30:47
Yes. Well, a tax on imports.
30:50
So you're not...so you're taking money out of the economy through taxation.
30:55
And the other countries reciprocate, which means they're imposing a tax on American goods going out.
31:05
So you have diminished demand by virtue of the tariff, and you have capital being taken out of the market by virtue of taxation.
31:15
This after you have the loss of capital because nobody believes in credit.
31:23
Okay.
31:25
So you find that the stock market is crashing, and let's say you have some savings in a bank.
31:35
What do you do? Go get your own money.
31:38
So let's go back to them for a moment here.
31:42
So we had the tax cuts.
31:46
We had the credit.
31:50
We had the cash.
31:53
And what else did we have? And we had the stocks.
31:57
Alright, so the stock market crash. What happened to the capital value of the stocks?
32:01
And it's gone. And what happened to the credit markets?
32:07
Oh wait, there's more.
32:10
So you got people going to the banks to take their money out of the banks.
32:16
I was going to say...Alex, I don't know if Mike caught it. For those of you on the record, he said, oh shit.
32:22
Now that's about right.
32:26
See, he's on the roller coaster with us. See, that's when you've got good radio going.
32:30
Alright.
32:34
So people show up, they go to the bank, and they say, I want my money, I want all of it.
32:38
How many of you have the relative who thinks that their money might be better stuffed under the mattress?
32:43
That is literally because they didn't trust banks.
32:46
Anyways, if your bank goes up, the government of the United States insures your savings account.
32:52
In 1930 and in 1929, when your bank closes, it doesn't...they didn't give you your money.
33:01
Do you get it? No.
33:04
So what aspect of capital also got starkly reduced?
33:08
Cash. Do you see what's going on?
33:17
So we have the loss of credit, we have the loss of cash by virtue of the bank closings,
33:21
you have the loss of stock by virtue of the stock market crash,
33:24
and all of a sudden an economy that is built not on produce, not an agricultural economy,
33:30
but a capitalist economy is not having a good time.
33:36
Now, the US starts saying to its creditors, or rather to the people they lent money to overseas,
33:44
especially during World War I, where's my money?
33:48
Do Europeans have the money to pay us back, especially the British or the French?
33:51
No. They are themselves running into their own economic calamity.
33:56
This is a global depression.
33:59
1930, you had 4 million people unemployed.
34:08
1931, 8 million. 1932, 12 million.
34:11
At the height of the depression, you had an unemployment rate of 25%.
34:16
This is in a country where women did not typically work.
34:20
So when we're talking 25% unemployment, you're talking 25% of American households were going hungry
34:27
because there is no social welfare state.
34:30
Nowadays, if you're unemployed, you go to the government, they give you a check,
34:33
they give you an EBT card, you take it to the grocery store, you can still eat if you're unemployed.
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At this time, you don't work and you don't what? You don't eat.
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So you have hunger and malnutrition abounding in American homes.
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Put it to you this way, if you lived in the countryside and you have hunger abounding,
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you have people now hunting small game, squirrels and rabbits for subsistence.
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Jackrabbit sandwich was one of the things that people ate during the Dust Bowl, which I'm about to get to.
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Okay, so you have homelessness, you have people going to work houses to try and make ends meet
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and eat off some kind of gruel that they have.
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Homeless people in assorted places.
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A lot of people decided to live a mobile vagabond existence, picking up whatever work that they could.
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As migratory laborers doing odd jobs, as migratory laborers doing farm work,
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anything that they could do to make ends meet.
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This is the rise of tramps and hobos.
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Now I'm actually going to do a little bit of translation because Lindsay just laughed
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and you already lived through the language lesson.
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Nowadays, we use the term tramp to mean slut.
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That's not what the word means.
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A tramp was a traveling vagabond.
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Tramp and hobo are interchangeable.
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This is why in the film Lady and the Tramp, Tramp is, again, he was a mutt, he was moving around a lot.
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This was not Disney endorsing the alternative lifestyle.
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I know some of you were a bit confused by this because you can't think past your own words.
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It's a good one though.
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I know, I know.
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Well, no, she's heard it twice because it came up in psychology.
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We got into Sefir Worf's hypothesis of linguistic determination.
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Okay, crime rates soar.
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Something else kind of awkward, kind of interesting.
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So this is when you have your famous Bonnie and Clyde.
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You also have the mob bootlegging, stuff like that,
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because when you're economically depressed, you need a good stiff drink.
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Also, kind of interesting, and an aside, by the way, prior to refrigeration,
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what was a great way of storing food to maintain its nutritional value?
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Fermentation.
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Well-made beer is packed with calories.
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So here you got the prohibition.
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You have an economic downturn, but you can't drink, even though you are probably economically and physically depressed,
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and you have people worrying about starvation.
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Sorry, this was not the best way of doing this.
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Anyway, crime rates go up.
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Also kind of interesting, kind of hilarious, but not.
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So you know what else was selling for the cheap into the 1920s and into the 1930s?
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So you know, remember back in World War I, it kind of abruptly ended about 1918?
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Government of the United States bought a whole lot of guns for World War I that didn't see service,
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and so they went to the military surplus market.
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Bolt-action M1903s and Browning automatic rifles and Thompson submachine guns,
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and they were perfectly legal before 1932.
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Favorite among mobsters and Bonnie and Clyde?
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No, when you had Clyde busting out with the BAR, I mean, that was just all kinds of exquisite.
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But anyway, all right, homeless children abiding.
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Now, just when things couldn't get possibly any worse, you have...
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Steinbeck needs to go away.
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Well, yes, we'll get to Steinbeck in a minute.
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You have a massive drought in the American Great Plains, the Dust Bowl.
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So even the agricultural economy is hurting.
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Now, industry is down, capital is out, and ag is in the troubles.
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Now, one thing I don't think you appreciate, because again,
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your experience with the biblical literature leaves something to be desired.
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The book was called The Grapes of Wrath.
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What's that a reference to?
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The current...
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No, Book of Revelations.
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The bowls of God's wrath poured over the earth.
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So you've seen a world at war.
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You've seen a pandemic that killed twice as many people as the war.
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Now you see an economic calamity and mass starvation.
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You have war, famine, pestilence, and death.
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And so Steinbeck talking about this, thought of this as some type of dreadful judgment.
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Now, the term Grapes of Wrath also comes up in the Battle Hymn of the Republic.
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He is trampling down the vintage where the Grapes of Wrath are stored.
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This is about Armageddon.
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I mean, not the book, but the title reference.
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Now, the book itself, and I'm going to kind of do two slides through.
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Steinbeck tells the story of the Joads.
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The Joads are a family on the Great Plains who, they lose their farm because of foreclosure,
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because of the Dust Bowl and the Depression.
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They're pushed off the land.
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They pack up into their car and they head west to California
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to try and make a living as migratory farm workers picking fruits and vegetables in California.
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They get there only to find there's no work.
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And so not only are they overextended, they're royally screwed in all kinds of ways.
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It's a great film.
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I don't have time to show it in class.
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Okay, married working women.
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Working women were only unemployed at 20%, whereas men were unemployed at 25%.
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Women had a better shot of getting a job than men because you could pay them less.
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As a result, very often, some families deliberately had a strategy where the husband would abandon the wife
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to actually give her a better shot of landing a job and it's one less mouth to feed.
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It is that dire of a situation.
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Of course, racism does not help in the face of scarcity.
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African Americans, Mexicans, and Asians competed with the Caucasians for seasonal farm work.
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Here we have a riot as people are applying for a job and they needed to bust out with the cops.
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The migratory farm workers, they were called Okies.
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This was actually depicted in the Grapes of Wrath.
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Hang on, I'm not done.
41:06
I've got quite a few minutes to get through.
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Okay, so now, Hoover's effort at the recovery.
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What did I say was the worst thing you could possibly do in an already strapped economy for cash?
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Increase taxes.
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What does tax increases do?
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It takes money out of circulation.
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Now, when your government revenue is based on income and people aren't working,
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what happens to your government revenues?
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They go down.
41:38
So Hoover tries to increase the tax rates on people who are already working,
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but that actually takes more money out of circulation, making the situation worse.
41:48
You have the rise of shanty towns all over the United States,
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especially in the cities as people were losing their land, as people were losing their homes,
41:57
and so they had to resort to these squatting communities,
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and private charities simply could not cope with the scale.
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Here are some of the places, some pictures of the shanty towns,
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and who do they blame?
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Hoover himself.
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Now, here's the thing I want you to keep in mind.
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You have protest movements in the agricultural communities,
42:28
you have protest movements in the urban communities.
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Congress passes the Reconstruction Finance Corporation after the election of 1930,
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which is the beginning of trying to rehabilitate the nation,
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but there is an element of too soon, too late.
42:41
So the farmers are actually dumping their crops to increase the value.
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Meanwhile, you have starving people.
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And also, what else, what other dissident movement might find it very interesting
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that capitalism does not work?
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The American communists.
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That fear of American communists taking advantage of an economically distressed United States
43:09
will drive some people to do some rather desperate things that in the end
43:13
will cost Hoover the election and will lead to the rise of a charismatic leader
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that will forever alter the relationship between the citizen and the nation state.
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More to follow on Friday.