In the early 1900s, the banking system wasn’t as stable as we might have hoped. Banks loan out money to borrowers, but are susceptible to a panic when a lot of customers want their money held in savings. A bank run occurs when a large number of a bank’s depositors attempt to withdraw their money simultaneously because they believe the bank will become insolvent. This happened frequently enough during the Great Depression that it put pressure on the President to create an insurance program.
In this animated short from the Walt Disney Company, Uncle Scrooge discusses the history or money and the importance of money in the overall economy. There are A LOT of great teaching opportunities in this clip and would make a great summary of a money supply lesson or a required video to be watched before the lesson.
Opening to 7:15
History of Money
Huey, Dewie, and Louie visit Scrooge McDuck and request that he help them save the money they had earned. Scrooge goes through the history of money and discusses the role of salt as the original salary that Roman soldiers received. He then goes on to describe money from other societies and why money was important following original barter economies. The characters even discuss the role of money as a medium of exchange!
7:15 to 9:59
After learning of the importance of money in the economy, the brothers question why central banks don’t just print more money if everyone wants it. Uncle Scrooge discusses the role of fiat money and why it’s important for the money to be backed by something or someone who can promise to pay the notes that are printed.
10:00 to 13:20
Financial Planning and Taxes
Uncle Scrooge teaches the brothers about the importance of budgeting. People need to make sure that they allocate a portion of their income toward rent, food, and other necessities. He also teaches them about the role of taxes and how important it is for governments to have a budget and make sure that they collect taxes to pay debt.
13:20 to End
Velocity of Money & Investment
The boys are curious why Scrooge keeps so much money in his vault if he tells them that it’s important to put money “to work.” He teaches them that the money in his vault is just his petty cash and then goes on to discuss the importance of money circulating through the economy. The ending portion discusses the role of corporations issuing stocks and shareholders collecting dividends. At the end, he signs the boys up to manage their funds, but charges them a fee. The boys aren’t happy, but he laments that “nothing is ever free.”
Lil’ Dicky shows the process of trying to make the most epic rap video of all time, but without spending much money. The entire song looks at a variety of ways that Lil’ Dicky tries to save money and avoids spending money on unnecessary expenditures “just to flex.”
The growth of professional sports over the past few decades has also meant that athlete salaries have grown as well. The issue? Professional athletes fresh out of high school and college (most under the age of 22) are become overnight millionaires, and most lack the financial literacy to handle that adjustment. Surprising to most, a large percentage of professional athletes declare bankruptcy within a few years because of their inability to manage their finances. Nearly 16% of NFL players file for bankruptcy within 12 years of retirement and ESPN’s Broke looked at the prevalence of financial stress for professional athletes.
Stan tries to return his dad’s Margarittaville machine so that his family can have a bit more money during the recession. Turns out that his dad bought it on a finance plan, which has been repackaged and sold to investors. Similar to mortgage-backed securities, loans can be issued for assets and then re-packaged to spread out risk among risky investments. If you’re looking for an easy way to teach about the MBS crisis, this scene does a great job condensing the major components.
Thanks to Zoe Cook-Nadel for the suggestion!
Stan heads to the local bank to put a check from his relative into a bank account, but the South Park Bank is pretty terrible with their investment strategy. Unknowingly, the economy is about to tank and depositors are finding their money is suddenly gone.
Thanks to Zoe Cook-Nadel for the suggestion!
Henry Gribbohm lost a few hundred dollars trying to play a carnival game to win an Xbox, but then went home to get his life savings, $2,600, which he then proceeded to spend at the carnival game. Gribbohm claims the game is rigged, but he did walk away with a giant banana with dreadlocks. While humorous at first, it does paint a picture of financial literacy should be an important component of secondary education.
Thanks to Tammy Batson for the suggestion!
Athletes are notoriously bad at saving money and making smart financial decisions after coming into their fortunes. Carl Nassib, a defensive lineman with the Cleveland Browns, discusses the power of compound interest with other rookies. His goal is to convince his teammates not to go out and spend $10,000 on a needless purchase because that means they are giving up a lot more money later in life. While 10% may be an unlikely interest rate, the power of compounding interest is one of the key principles in financial literacy programs.
In Lucy and the Great Bank Robbery, Lucy and Viv rent their room people trying to visit the New York World’s Fair. Unbeknown to Lucy, she rents the room to two bank robbers who have decided to rob Mooney’s bank at night. After the heist, the bank robbers discuss whether they should stay in town and actually visit the World’s Fair or if they should leave. One of the robbers dutifully notes that money is only good for two things: stealing and spending. While your economics instructor would probably advise against the first part, we typically focus on the role of money as being only used for spending or saving. The two then go on to discuss how they’ll store their money since they can’t put the stolen money back into the bank. Saving money at home (in mattresses or in the ground) are common ways that money leaks from the money supply.
This young Thai kid dreams of being an astronaut and making great scientific discoveries, but he’s got to save enough Baht (Thai currency) to be able to afford to the telescope. For reference, 2500 baht is about $75 US. The young boy is tempted by ice cream, street food, video games and toys, but he maintains his frugalness and saves up enough to buy the telescope. After enough time, he rushes to the store to buy the telescope, only to find out that the telescope now costs 3500 baht. The message is clear, inflation occurs and makes the value of money deteriorate over time. This Thai bank is encouraging savings to help combat that.
Thanks to Peach Tantihkarnchana for the clip suggestion!