Does 15,000 = Hope?

buy sellThe text explains in great detail the economic causes of the Stock Market Crash in 1929 and the Depression that followed but only hints on the role feelings and emotions play in the economy. The Dow Jones Industrial Average hit all time record highs this week when it surpassed 15,000 points so we should be a confident nation. Are we? Charles Dow and Edward Jones created this index in 1896 to track 30 “blue-chip” companies by compiling how many stock shares were purchased or sold each day. This index, combined with other factors provide investors an idea of the economy’s direction (and attitude). Click on the Dow Jones link above and write down the Dow’s total in 1896 – find the high number for every 25 years or so – what can you say about the confidence of the nation during those high years? What events occurred?

In the movie, Cinderella Man, boxer James Braddock says he prefers to fight in the ring because “at least then I know who is hittingbraddock me.” During the Great Depression, Braddock and millions of people did not know what or when the next economic hit would come from and whether they would be able to recover. Hoovervilles, soup lines and the Dust Bowl were a reality which FDR attempted to eradicate through his New Deal Programs. The irony to me is that although we have data driven indices like the Dow to track the economy, the intangible feelings of consumers often guide it. Although I would never claim to be an economist, I will share a personal story about the recent “Great Recession.”

As you may know, I owned a very small residential Architectural Design business for 7 years before the Recession hit in 2008-09. The building industry thrives when people are optimistic. Simply put, a client will build a new home or an addition if he feels secure in his job. Once the recession hit in 2008, consumer confidence crashed and suddenly their existing residence seemed ok as they were scared to invest in a bigger, newer home.  That was bad news for designers and builders. I had numerous conversations with builders and contractors who would stop in my office to chat because they were embarrassed to go home early due to a lack of work. These were husbands and fathers and most conversations revolved around fear of what is to come next. From where will the “next invisible punch” come and how hard? Will I lose my way of life, my home? Many did lose their business, some their homes while others like myself left the industry all together. Best yet, there are those inspiring, steadfast small business owners who though fearful at times, refused to be knocked down long and are successfully riding the economy out today. I looked at the Recession as an opportunity to take the time to decide once and for all if my vocation, or life’s calling, really is to teach which I had felt since I served as an 1997-ASC. My “fear”(and it was real) was supplanted with the dedication needed to complete education college courses and begin an extremely fulfilling teaching career.

More historic examples of Fear’s role in the economy:

  • One of FDR’s advisors stated that “a Depression is much like a run on a bank. It’s a crisis of confidence. People panic and grab their money” (Text 660).
  • January, 2009 Time article warned during the depths of the Great Recession that “The fearful are far more pessimistic, and it’s a short journey from pessimism to withdrawal [from the economy].”
  • Play the famous FDR “Fear” portion of  his First Inaugural:

So it should make sense how stories like James Braddock and other athletes lifted the spirits of some Americans and maybe even momentarily lifted some of their fear away. Many other Americans used the various forms of entertainment discussed on pages 636-37 in the text as a way to deal with the Depression era’s hardships. Choose one of the examples on those pages and discuss why it was popular and link a historic picture/clip of that event during the Depression.  Listen to one of  FDR’s “fireside chats” (also see text, 653) for language the president used to alleviate the citizen’s fear. How does the president talk to the American public today? Is it similar? Do you think the US is more hopeful or fearful today as compared to the Great Depression or Recession Eras? Give an example to prove your point. Where do we look to alleviate fear or gain hope? What is something that makes you fearful? hopeful?

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15 thoughts on “Does 15,000 = Hope?

  1. I think that the US is more fearful today than hopeful. I think this in part because it is easier to be scared than it is to be filled with hope. Many of our grandparents and even great grandparents have encountered The Great Depression as well as The Great Recession. This adds to the fear, because people recognize how quickly things go wrong. The New York Times article discusses President Roosevelt’s declaration on the fear that was a result of The Great Depression. His declaration says, “the only thing we have to fear is fear itself.” Roosevelt’s claim encourages US citizens to not be afraid of what the current time holds because the that fear can escalate into something much greater.

    http://topics.nytimes.com/top/reference/timestopics/subjects/g/great_depression_1930s/index.html

    After the Great Depression, a certain degree of fear still existed. Then in 2008-2009, The Great Recession hit the US and was the biggest global economic crisis since The Great Depression. The recession restarted this seemingly lost fear that was a result of the depression. The recession was recent, therefore the fear it started has not yet stopped. Thus the reason I believe we still live in a society filled with fear.

    We, as Americans, look to comforting objects or ideas to gain hope and look away from fear. Just as a little kid crawls into bed with his parents during a thunderstorm, US citizens turn to comforting things. Whether it is nature, sporting events, or a book, there are escapes for everyone. Sometimes these escapes are harder to find, but that is where our inner James Braddock comes in. Braddock fought and fought, both mentally and physically for what he loved. In the movie, Braddock’s opponent knocked his mouthguard out. This is a symbol of defeat, yet her keeps fighting and eventually wins. A quote from the paper that next day says, “Braddock has come back from the dead.” This shows that no matter how bad something seems at one time or another, things always get better. Fear should not define us as US citizens, no matter what the circumstance is.

    • Thanks for the comments, Parker. Your article link notes that it was not until 1954 that the market surpassed pre-crash levels which shows how much better the Recession and our recent 15,000 mark has been in comparison. Look in the book under the pages I noted and determine which one of those was most effective in your opinion in providing a break from the day to day (and post a historic link or pic). You got us off to an excellent start.

  2. During the Great Depression many American citizens escaped the harsh reality though media, specifically movies. Disney was able to succeed because of the popularity of movies. Disney is still bringing top quality movies to this very day. In 2008 when the Great Recession occurred media sales again spiked but not in movies this time but rather video games. Video games offered the same escape that movies did but involved the viewer more allowing for a more effective escape from reality. 2008 was the first time that video games ever out sold movies at about a 52% to 48% in the total media sales of the year. Also just how Disney was able to succeed because of the Great Depression the Wii was able to Succeed because of the Great Recession resulting in such memorable titles as Mario Kart Wii, Wii Play, Wii Fit, and Super Smash Bros. Brawl games loved by many. While people many have been hurting during the Great Recession the video game industry was benefiting from it.

    Movies Outsell Games: http://www.tomsguide.com/us/Games-DVD-Blu-ray-Economy,news-3364.html

    Video Games Top Seller (08): http://vgsales.wikia.com/wiki/NPD_2008_sales_figures

  3. During the Great Depression many American citizens escaped the harsh reality though media, specifically movies. Disney was able to succeed because of the popularity of movies. Disney is still bringing top quality movies to this very day. In 2008 when the Great Recession occurred media sales again spiked but not in movies this time but rather video games. Video games offered the same escape that movies did but involved the viewer more allowing for a more effective escape from reality. 2008 was the first time that video games ever out sold movies at about a 52% to 48% in the total media sales of the year. Also just how Disney was able to succeed because of the Great Depression the Wii was able to Succeed because of the Great Recession resulting in such memorable titles as Mario Kart Wii, Wii Play, Wii Fit, and Super Smash Bros. Brawl games loved by many. While people many have been hurting during the Great Recession the video game industry was benefitting from it.

    Movies Outsell Games: http://www.tomsguide.com/us/Games-DVD-Blu-ray-Economy,news-3364.html

    Video Games Top Seller (08): http://vgsales.wikia.com/wiki/NPD_2008_sales_figures

  4. I think the nation as a whole is split between fearful and hopeful by social or economic classes. I’m guessing that the majority of the upper and upper middle class are fairly hopeful for our counties future. With businesses starting to pick up again along with the housing market coming back pretty strong, many people are having a rise in their level of confidence. On the other hand though, I think the lower classes of the United States might not be as hopeful as the rest of the country. There are still many people that were hurt by the recession and our unemployment rate is pretty high compared to where we would like it to be, and a lot of that affects the lower middle and lower classes quite a bit. I know people that have been working for a job for a long time that are lower middle class and cannot seem to find one. But on the other hand our neighbor just lost his job, and within a week or two he had already gotten another one that was just as good, if not better.

  5. `Radio was another way to deal with the depression era. The radio was a way to escape the reality of the depression for many people whether they were listening to radio comedians looking for a laugh, listening to stories on super heroes looking for adventure, or soap operas looking for drama. All in all the radio is like TV today, it can occupy a person and keep their mind focused on something other than the hardships of the depression.
    I think that today the US is more hopeful than it was in the depression because people were not nearly as affected by the recession as they were by the depression, for example there weren’t hooverville like setups throughout the country. Today we look to the government and big US corporations to alleviate fear and gain hope in the economy. Today what makes me fearful is the debt that the country is in because I know that my generation is going to be paying for this debt. But what makes me hopeful is people like Scott Walker who are cutting government spending.

    http://www.allmusic.com/album/radio-stars-of-america-mw0000208533

  6. To the question: Do you think the US is more hopeful or fearful today as compared to the Great Depression or Recession Eras? Give an example to prove your point.

    I do believe that Americans today are more hopeful. We will never know when this Recession officially ends but I think this past week proves that we are on the right track, The numbers explain it all. The DOW hit 15,000 which means investors ARE investing. We can only hope this stays the same or goes up. We will never know,

    • As a follow up to your comment, generally, we do know when we leave a Recession. When economic growth occurs on a variety of indices like the Dow or other data like new housing starts increase, that is a clear indication a recession has ended. Another indicator is when the unemployment rate goes down to pre-recession levels. You may not be able to pinpoint exactly the time or date when the Recession officially ends but a combination of data and improved consumer behavior will indicate when one ended. Thanks for the post.

  7. Going to your 1st point about when the stock market was the biggest, the highest points were right before the Great Depression in 1919 and right after the Depression in the early 30’s. The next time we had a boom in the economy was late 50’s/60s. It really started to boom when the whole technology blast in the early 2000’s. And the stock market finally reached the 15,000 point mark which now officially moves the nation out of the Great Recession. Today to alleviate the pain or fear the economy or international fear we receive, we tend to look toward the Government and especially the president. Today i believe the president does speak enough to the nation as a whole. If you go to http://www.whitehouse.gov/ Obama speaks to the nation every week on the Weekly Address.

    To the question: Do you think the US is more hopeful or fearful today as compared to the Great Depression or Recession Eras? Give an example to prove your point.

    I believe that we are more looking towards fear at this point because during the Great Depression, our nation hit an all time low economically standing. I believe that we are more fearful of what capabilities other countries have on us. We are fearful of what China could potentially do if they “pull out” of American industry.

  8. (10 pt response)
    I found an interesting link regarding the Dow Jones and its movements. http://useconomy.about.com/od/stockmarketcomponents/a/Dow_History.htm
    It’s really a measurement of how confident the people are. Their confidence can involve the economy but also other events like the Cuban Missile Crisis in 1962. It’s almost a question of whether the people like the way the country is being run.

    One would think that tthe US is a hopeful place since the Dow Jones has never been higher, but I don’t see it that way. I certainly think we are much more hopeful than people in the Great Depression because so many people had miserable lives during that time. I feel like we can see a faint light through the darkness right now. Picturing myself in the Depression, I don’t think I would have any hope in my life. Our economy right now is so much better than during the Depression, so there has to be more hope. 15000 is a deceiving number right now. Just look at the presidential election back in November. Both candidates were trying to explain to America how they would fix the countless problems we have. They were not talking to a hopeful nation, but a country struggling and needing change. Within the last year we’ve added terrorism and mass shootings to our list of problems, which adds to the tension.
    http://m.youtube.com/watch?v=Fm3-YjBox4I

    The link above is from President Obama’s 2008 campaign. He talks about hope and how strong hope can be. He says that he was raised by a single mother that gave him love, an education, and hope. Barack Obama went from growing up in a poor family to being president. President Roosevelt tried to do the same thing during the Depression. He told the American people that there would be opportunities for better lives in the future. In rough times, the people in control of the family or country need to lift up people and tell them that they can reach new heights. Those are the people we look to in order to gain hope. It’s hard to lift ourselves all on our own. Those older and wiser try to put us in positions to succeed, especially when we’re down. Sometimes in baseball, players go through heavy slumps. A lot of the time, they’re moved down the order or not played. But I’ve also seen coaches put slumping players right in the heart of the lineup where they can get some at-bats with runners on base. We look to our government and families to put us in position to give us hope that there is an end to the struggle.

  9. I believe that the stable increase in the stock market ensures a prosperous future for our generations and generations to come. Todays Dow Jones point total of some 15000 points opposed to the stock markets lowest 41 shows a great fluctuation in market growth and fall. the recent and stable increase in the Dow Jones points us towards a more successful future. Although a depression such and the Great Depression could happen at any time current rules and laws prevent such a drastic drop so suddenly. For instance the FDIC (federal deposit insurance corporation) ensures your money that is in the bank up to a certain amount, $100,000. This new law encouraged American citizens to put their money in banks therefore helping the economy because of demand for loans.

  10. I believe that Americans are both fearful and hopeful, and not just one or the other. i don’t it is only the upper class that feels hopeful and the lower classes that feel frighten of loosing everything. I believe everyone is precious after the Recession. People seem to be opening up businesses, but is it really because they feel confident that they will win more than they invested in that business or are they opening up businesses, investing, and putting money into the bank because they know it is the won thing that will help the economy? Sure they are hopeful that it won’t leave them completely broke, but they are still worried that the market will dip once more.
    i live by a motto, “expect the worst, and hope for the best.” i apply this motto to my very day life when i think of something i want or something that i am looking forward to. this motto can be applied to Americans today. They invest with cation, and hoping things are going to get better.

    • So if I understand you correctly, you are saying it can be healthy to have a balance between hope and fear and not allow yourself to go too far to one side or another – especially when it comes to money and economics? Thank you for the comment.

  11. I believe that FDR’s way of addressing the general public through the casual fire-side chats was an effective way in ensuring the public that drastic measures were being taken in fixing the economic downfall. Looking at today’s president and other political candidates, I feel that we rarely ever see them addressing the public as family or friends. The way in which they describe certain issues or politics are often time over many people’s heads. Because of this people feel inferior and overwhelmed. This ultimately leads to many people ignoring what is being discussed and creates a lack of knowledge among the general public as to what current issues are occurring. FDR created a unique way to solve this issue by simply speaking to everyone as a friend or family member.

  12. Confidence:
    I believe America had great confidence during the early 20s. Their economy was thriving because of the bull market.
    Depression Hardships:
    Walt Disney, one of the most famous persons in the TV/movie business, made cartoon animated films that caught the attention of people because it was new to them and it got people’s mind off of the tough times of the depression and got them to laugh and enjoy themselves.
    http://peacepulse.blogspot.com/2012/10/walt-disney-1901-1966.html
    Roosevelt and Obama:
    Barack Obama talks to the American people more formal then Roosevelt did. Roosevelt was more personal with his remarks toward the American people, that is probably why his points came into action because the American people listened to him.
    Hopeful:
    I believe America is more hopeful than it was in the past great depression and recessions. I believe this because almost everyone with money has their money in the bank and is investing in some sort of stock, which explains that people are confident the economy is stable enough.
    Fear and Hope:
    People look to alleviate fear and gain hope by spending time with their family. Also people do this by talking with their bankers. But others just sit back and ride the wave of the economy out.
    Fear and Hope:
    Losing my family is something that I fear. What would I do without them? Would I survive?
    Seeing that the economy has bounced back from the recession so quick compared to how slow the economy bounced back from the depression makes me hopeful.

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