Why Study Economic Downturns?

We study history, in part, to learn lessons from the past so that may help us to solve the challenges of today. A project-based investigation of the main causes, impacts, and eventual solutions of the Great Depression may offer your class some insight as to how America might best go about repairing today's economy. 

Economic Downturns: Stock Market Bubbles and Crashes

Students can investigate the cause and effects of the Wall Street Crash of 1929. Bring together social studies, economics, and math by asking pupils to investigate the significant growth that preceded the consequential drops during certain crashes in history. For instance, the Dow Jones Industrial Average had a value of 63.9 in 1921, and by September of 1929 it had risen to 381.2. Young scholars might investigate what factors contributed to this exponential growth. They can also look at the factors that led the Dow Jones Industrial Average to lose 89% of its value in July of 1932.

Similarly, during the Dot-com bubble, the stock market reached another peak. (March of 2000) The NASDAQ climbed to over 5,000, largely because of speculative trading. Have your class research why this bubble burst.

More recently, the financial crisis of 2008 has been called by many economists the worst financial crisis since the Great Depression. Within this crisis, there was yet another bubble: the housing bubble that peaked in 2006, but was deflated by 2008. Banks and financial institutions profited from a leveraged housing industry, which was overvalued, and that then led to the collapse of huge “too big to fail” financial institutions. Again, the nation experienced a plummeting stock market. Researching this crisis, its bubble and subsequent fall, in conjunction with the Wall Street Crash and the Dot-com bubble will likely cause your students to see the real-life application of studying history in order to avoid repeating mistakes.  

Economic Downturns: The New Deal and the WPA

From 1933 to 1938, Franklin D. Roosevelt promoted many programs known as the New Deal in order to stimulate a recovery for America's depressed economy. He implemented a national work program known as the WPA: the Works Program Administration. In this program, millions of workers across America were given jobs in order to rebuild America's infrastructure and spirit. In 1938, the WPA provided three million unemployed Americans with work. It also distributed food, clothing, and housing to those in need. Other major changes instituted during this time included the creation of minimum wage, the United States Housing Authority, Social Security, the Farm Security Administration, and the Fair Labor Standards Act of 1938. Consequently, some people argue that it was FDR’s leadership and the New Deal that began to rescue the American economy, while others believe World War II brought the country out of the Great Depression. 

Divide your class into two groups. Have them research the New Deal, the WPA, and the effects of World War II. One group should be assigned the task of compiling evidence that FDR's leadership rescued America's economy. The other group should gather facts substantiating the idea that World War II economically resuscitated America. Once the research is complete, have a class debate or discussion where each side can present their findings. You could extend the lesson by assigning a research paper or group presentation.

Ending the Current Economic Downturn 

Just as there are two schools of thought as to what ended the Great Depression, there are opposing views as to how to end the current recession in the United States. Your class can research the Keynesian economic theory in order to decide whether or not federal intervention would help the current situation. Undoubtedly, you will have a few pupils who are fascinated by this study. If they want to go more in-depth into this investigation, suggest they read End This Depression Now! by Nobel Prize-winning economist Paul Krugman.

In order to make an informed decision as to how best to solve the financial crisis, also have your class consider the effects of no government intervention. They can investigate the concepts behind the laissez faire economic theory and a free market economy. Once the research is complete, you are sure to have some lively class discussions!

Economic Downturns: Effects on the Individual

Now that you have objectively studied causes and solutions of economic downturns, bring in a subjective perspective by learning about individuals. It is impossible to understand the depth of economic recessions and depressions without observing the effects the economy has on real people. 

If you can find anyone in your community who was alive during the Great Depression, invite them to visit your class to talk about their lives during this difficult period in American history. If you are unable to find someone, have your class read about individuals during this time period. John Steinbeck's, The Grapes of Wrath is an obvious choice. However, there are many lesser-known titles. I recommend The Great Depression: A Diary by Benjamin Roth, edited by James Ledbetter and Daniel B. Roth. It is an excellent source to connect a first-person account with hardships prevalent in the Great Depressions as well as in today's depressed economy. 

Invite a panel of people who are currently experiencing economic hardship to visit your classroom. Ask each person to take about five minutes share his situation with the class. For instance, if someone is on your panel because he has lost his job, ask him to tell the class how this affects him. Let him know that you are looking for the personal touch. So, not just that he is struggling to pay for rent and/or food, but also that he feels useless or depressed. Allow enough time for pupils to ask questions. 

Lessons:

Economic Crash and Recovery

Learners compile research notes on the Great Depression through library and internet research. They research the New Deal policy and orally present their findings in order to create a class matrix on the different New Deal policies of the Great Depression.

The Great Depression Mystery

Young researchers use Internet research to try to figure out how the Great Depression occurred.

Exploring the Great Depression through Pictures and Music

Young scholars  discuss causes of the Great Depression and analyze artifacts from the era. Learners discuss the impact of the Depression and analyze photographs and music lyrics. In addition, they write a journal entry and create a song or narrative describing the struggles of Americans.