Its A Wonderful Life And Economics

3 Pages 869 Words

It’s a Wonderful Life

It’s a Wonderful Life is a classic film that depicts the best of times during the early 20th century as well as the worst of times. The film starts out in the town of Bedford Falls, where prior to the Great Depression there had been great expansion especially in the financial market. It continues on to show the life of George Bailey from his childhood to his adult years and how the Banking and Monetary Policies of that time affected not only his life but the lives of others throughout the town. This type of fractional reserve banking is shown throughout the movie, except the only problem is the public did not realize how George Bailey’s (Main Character) Building and Loan worked.
It was the 1920’s and all seemed to be going well. Many people were earning an abundance of money and were investing in stocks, bonds, and banks (financial intermediates) like no other time in history. With the growth and expansion brought about growth in banks or building and loans as well. More and more people were investing there newly earned money in banks around the country. These banks then took their household savings which were deposited and loaned them out again. Most banks made loans with big businesses that then were able to continue to expand and hired new workers, which helped to spur on this economic expansion. However the Bailey’s Building and Loan, was more organization so that the local people would receive the money for homes instead of the large businesses. The Building and Loan provided these local people who previously were unable to borrow money, the ability to received funds and use them to build homes. They were far more concerned for their local people than the big business, which eventually became a problem.
It became a problem because George was so willing to lend out so much money that eventually when the markets collapsed there was none to give out. You see the local people in the town did not...