The Economy in the Late 1920s (#3 on study guide)

Transcription

1 Dr. Donnelly

2 The Economy in the Late 1920s (#3 on study guide) Economy appeared healthy: Stock market rose from $27 billion in 1925 to $87 billion by October 1929 this led to widespread investments in the market. Welfare capitalism: due to high profits, employers were able to raise pay & benefits for workers this prevented workers from going on strike and improved their loyalty to the companies they worked for.

3 Economic Danger Signs (#1-2) Credit spending, desire for new products put many deep into debt. 71% of families made less than $2,500 per year. 80% of families had NO savings. Problems with playing the stock market: Speculation: making risky investments in shaky businesses, then hoping the stock somehow rises. Buying on margin: instead of paying cash for stocks, investors paid only a fraction of the stock s price and then borrowed money to pay the rest the borrowed money had to be paid back with interest, so buying on margin could only work if the price of the stock continued to rise!

4 More Danger Signs (#2 & 6) Overproduction and underconsumption: American manufacturers were producing more goods than people were consuming (buying). Many farms and rural banks had failed in the 1920s so rural Americans tended to be poorer. Factory workers in the cities also earned low wages.

5 Charles Ponzi and the Ponzi Scheme Charles Ponzi became famous as an overnight millionaire after World War I. Exact amount of Ponzi s money is unknown, but was definitely in the millions and $1 in 1920 was equivalent to over $10 today. How did he do it? Ponzi had family & friends in Italy he found out that international postal reply coupons could be bought cheaper overseas, then redeemed at face value in the U.S.

6 Ponzi s Pyramid Scheme Ponzi began selling international reply coupons to investors, promising them they d make a fortune. Early investors (the top of the pyramid) were paid with investments made by later investors (the bottom of the pyramid). As Ponzi grew famous for his rags-to-riches story, the government investigated him

7 The Ponzi Scheme Collapses Investigators found that although Ponzi had collected investments equivalent to 160 million international reply coupons there were in fact only 27,000 international reply coupons in circulation! It was obvious that Ponzi was selling products he didn t really have. Ponzi was convicted of mail fraud & larceny, and went to prison until 1934.

8 Bernie Madoff: the Modern Ponzi Investment banker Bernard Madoff stole $65 billion from investors with a modern Ponzi scheme through the asset management arm of his investment firm. On December 11, 2008, Madoff was charged with investor fraud the largest ever committed by a single person. Madoff was sentenced to 150 years in prison in Just as Ponzi s scheme led into the Great Depression, Madoff s led into what has been called the Great Recession. Ponzi and Madoff are examples of frauds occurring in prerecession/depression economies.

9 The Stock Market Crash (#7) The Dow Jones Industrial Average hit an all-time high of 381 on September 3, 1929 but then stock prices began falling. Black Thursday, October 24, 1929: stock prices continued a sharp drop that began the day before; investors panicked and sold their stocks for less than they d paid for them (trying to sell them before they lost ALL value due to the Crash).

10 The Unstoppable Crash Wall Street bankers pooled their money and bought stocks to calm investors and keep prices from dropping more, but this only worked for a few days. Black Tuesday, October 29, 1929: 16.4 million shares of stock sold as the market continued to fall. By November 7, the Dow Jones had dropped to and investors had lost over $30 billion. This crash was part of the business cycle the economy grows, then contracts.

11 Who did the Crash hurt? At first, the crash only affected those directly invested in the stock market only about 3% of the population. But the crash soon affected many others. Why?

12 Ripple Effect of the Crash (#11-12) Businesses & individuals who lost money in the crash couldn t pay back bank loans. Bank runs: many people tried to take all their cash out of the bank, but many banks couldn t pay it all back, ran out of money, and had to close. Bank failures: over 5,500 banks closed; 9 million savings accounts were wiped out. Businesses had to cut production & lay off workers; the unemployed couldn t afford to buy anything; this led to more production cuts & layoffs, which led to Unemployment skyrocketed over 25% in some places.

13 The Great Depression (#14) The Depression lasted from 1929 to Workers and farmers were hurt badly: factories closed, then small businesses; farm prices dropped lower. By 1932, 12 million were unemployed and Gross National Product had dropped nearly 50%. Impact on the world: other countries depended on business with the U.S., so our depression caused them to slip into depression, too.

14 Men waiting for free meals at soup kitchens

15 Underlying Causes of the Depression Unstable economy due to overproduction and underconsumption, uneven distribution of wealth (not that there were too many rich people, but there were too many poor people mostly farmers and unskilled workers). Overspeculation: too many stocks were bought with loans (on margin) and then used as collateral to buy even more stocks so the stock boom wasn t based on real value. Government policies: the Federal Reserve cut interest rates and put too little money into circulation.

16 Many homeless lived in Hoovervilles (shanty towns nicknamed for President Hoover) or became hobos (drifters). Farms failed; tenant farmers and sharecroppers lost their jobs; farmers destroyed their own crops and milk in protest when prices fell so low they d lose money by selling them. Social Effects of the Depression (#9)

17 Hobos riding the rails; hobo symbols

18 The Dust Bowl (#5) Drought and farming methods (taught by experts like Hardy Webster Campbell) left topsoil on southern & central Great Plains unprotected. Caused environmental crisis, severe topsoil loss - winds carried topsoil hundreds of miles away, leaving barren land behind. The Dust Bowl states were famous for dust storms called black blizzards. February 25, 1936: brown snow fell in New Hampshire and Vermont as result of dust from Great Plains mixing with snow clouds in New England.

19 Photos from the Dust Bowl

20 Life and Death in the Dust Bowl Jackrabbits ate so much of what few crops could grow that some local & state governments paid a bounty of $2 for each set of jackrabbit ears collected! Dust Bowl and low crop prices caused 60% of farm families in the region to lose their farms. Thousands of families moved away to find work commonly called Okies because so many were from Oklahoma, like the Joad family in Steinbeck s novel, The Grapes of Wrath.

21 Other Social Effects of the Depression (#8) Widespread malnutrition and health problems. Stress on families from unemployment and poverty. Racial discrimination increased due to competition for scarce jobs and general hopelessness.

22 Surviving the Great Depression (#15) Some farmers who had lost their farms to foreclosure got them back due to neighbors turning the foreclosure auction into a penny auction keeping bids extremely low and then giving everything they bought back to the original owner. Some states also passed laws to end all farm foreclosures.

23 Other Survival Tactics About 250,000 teens rode the rails to look for work at home, they were just more mouths to feed. Socialists and communists demanded government take control & distribute food, clothing, housing, etc. to everyone. Humorist Will Rogers used jokes and funny stories to keep up people s spirits.

24 End of Prohibition (#4) Prohibition was recognized as a failed policy, and ended when the 21 st Amendment repealed the 18 th Amendment in 1933 it was now legal again to buy, sell, and transport alcoholic beverages.

25 The Empire State Building (#16) At 102 floors and over 1,000 feet tall, the Empire State Building became the world s tallest building when it opened in This was seen as symbol of hope that the U.S. was still a great country, even during the Depression.

26 Hoover s Strategy for the Depression (#10) President Herbert Hoover first used a limited strategy in dealing with the Depression he believed voluntary actions by businesses, charities, and state & local governments could end the Depression. When this failed, Hoover was blamed for not having the federal government take action.

27 Hoover Changes Strategies Hoover then took more radical action than earlier presidents had ever done. Examples: Agricultural Marketing Act: bought, sold, & stored farm surpluses; made loans to farm organizations didn t work (drove up inflation). Government construction projects, like Boulder Dam (later renamed Hoover Dam) to put men to work. We later found out that this dam was only built to keep Megatron from being discovered.

28 More Examples of Hoover s Actions (#17) Hawley-Smoot Tariff: highest tariff ever to get Americans to buy more U.S.-made goods; backfired (other nations just retaliated by raising their tariffs on U.S. goods). Reconstruction Finance Corporation (RFC): made gov t. loans to banks, railroads, farm mortgage associations, state & local gov ts. modeled after WWI War Finance Corporation. Was continued by FDR when he became president. Home Loan Bank Act: lowered mortgage interest rates for Americans borrowing money to buy homes. All of these were to help people indirectly; Hoover didn t believe in direct federal aid.

29 The Bonus Army In 1932, 43,000 U.S. military veterans (nearly 20,000 were WWI vets) marched on Washington, D.C. to demand early pensions. They were supposed to be paid these pensions (called bonuses) in 1945, but wanted them immediately due to hard times of the Depression. Army troops commanded by General Douglas MacArthur used tanks & tear gas to drive away the Bonus Army on July 28, then burned their shantytown. Hoover hadn t ordered this, but was blamed anyway.

30 FDR Democrats nominated Franklin Delano Roosevelt (FDR) to run against Hoover in FDR s wife Eleanor was a well-known political worker & social reformer (at their wedding in 1905, Teddy Roosevelt had given away the bride Eleanor s father was deceased). FDR said he was willing to experiment with direct federal aid and promised Americans a New Deal to end the Great Depression.

31 The Election of 1932 (#13, 18) Hoover (R) vs. FDR (D) Battle of philosophies: those who felt government shouldn t try to fix people s problems supported Hoover, those who felt problems as big as the Depression required federal government action supported FDR. Many saw Hoover as too passive & uncaring to deal with the Depression. FDR was upbeat, energetic, & really seemed to care promised a New Deal to end the Depression. FDR won in a landslide.

32 Hoover and FDR The impression that Hoover did nothing to end the Depression is wrong by 1932, Hoover was taking drastic actions that no president had ever attempted before many of which were continued (like the RFC) by FDR once he became president. The most important difference between Hoover and FDR was that FDR s personality was much more charismatic and appealing. Ironically, FDR had once written of Hoover (years before Hoover became president): I wish we could find a way to make him president. There could never be a better one.

33 About FDR Unknown to many Americans at the time, FDR had to use a wheelchair kept this as secret as possible so as not to appear weak. He had contracted polio (or maybe Guillain-Barre syndrome) in August 1921 and been paralyzed later regained partial use of his legs, but could only walk with heavy braces on his legs & only for very short distances. FDR had several affairs, most notably with Lucy Mercer (Eleanor s secretary). Eleanor offered him a divorce when she found out in 1918, but FDR stayed married for family & political reasons.

34 The First Hundred Days During FDR s first 100 days as president (March-June, 1933) Congress passed a package of bills that were then signed into law by FDR to achieve the Three R s: Relief, Reform, and Recovery. Once passed, these new laws were the beginning of the New Deal. Ever since FDR, new presidents first 100 days in office have been judged to see what course their presidency has started out on.

35 Forging a New Deal: Restoring the Nation s Hope FDR famously said in his first inaugural speech: The only thing we have to fear is fear itself. He began giving regular radio broadcasts called fireside chats, that focused on giving people good news and calming their fears. In announcing the New Deal, FDR emphasized that it was all based on the Three R s Relief (for people suffering), Reform (of the government) and Recovery (of the economy).

36 The New Deal: Stabilizing Banks (#19) Many had lost their life savings when the banks in which they had their money went out of business after the Crash. FDR declared a bank holiday temporarily shutting down all banks in the U.S. to inspect their financial health. Only banks that passed inspection were allowed to reopen thousands were closed permanently. The Glass-Steagall Act created the FDIC (Federal Deposit Insurance Corporation) the FDIC insures every bank account up to $100,000 (if the bank goes out of business, the federal gov t. will pay you back the amount of money you had in the bank when it failed).

37 Correcting the Stock Market Another part of the New Deal was the Federal Securities Act & the creation of the Securities & Exchange Commission (SEC). The SEC regulates companies involved in the stock market.

38 The New Deal: Regulating the Economy National Industrial Recovery Act (NIRA), National Recovery Administration (NRA), and Public Works Administration (PWA). NIRA created both the NRA and PWA, plus lots of rules & regulations for businesses & unions. Included creating the new federal minimum wage (which actually hurt the economy by driving up prices). PWA hired men to build dams, bridges, etc.

39 The New Deal: Relief & Jobs The New Deal created the FERA (Federal Emergency Relief Administration), CWA (Civil Works Administration), and CCC (Civilian Conservation Corps). The FERA made federal loans to local relief agencies (soup kitchens, shelters, etc.). The CWA hired 4 million people to build roads, parks, airports, etc. The CCC hired 2.5 million young men for outdoor work, often in the west planting trees, building campgrounds in national parks, etc.

40 New Deal aid for homeowners & farmers Home Owners Loan Corporation (HOLC) and Federal Housing Administration (FHA): refinanced 1 million low-interest loans (lowered house payments so people wouldn t lose their homes). Agricultural Adjustment Administration (AAA): federal gov t. paid farmers subsidies to lower production (actually paid them to destroy crops, kill surplus calves & piglets, etc.). Idea was that this would raise crop & livestock prices.

41 The TVA New Deal also created the Tennessee Valley Authority (TVA). The TVA built a series of dams on the Tennessee River and its tributaries: this provided many jobs (building & operating the dams), flood control, and cheap electricity (hydroelectric power).

42 Key Players in the New Deal (#20, 24) FDR s Brain Trust: a group of intellectuals (Rexford Tugwell shown here) who helped FDR create New Deal policies. Frances Perkins: FDR s Secretary of Labor and the first female Cabinet member in U.S. history. Mary McLeod Bethune: Director of Negro Affairs for the NYA (National Youth Administration), who also organized the Council on Negro Affairs, often called the Black Cabinet. Eleanor Roosevelt, who acted as FDR s eyes and ears and promoted the New Deal across the U.S. O Brother Where Art Thou Brain Trust :

43 Harry Hopkins on the New Deal s goals (#28) Hopkins was FDR s head of the FERA, which put money into public works programs (building dams, etc.), which created many jobs. Hopkins believed the goal of the New Deal was to create jobs so people could EARN their own money and keep (or get back) their self-esteem (spirit). This is why Hopkins quote shows his preference that the New Deal should NOT give handouts from the government, but SHOULD hire men to do work.

44 The New Deal Falters All the new programs still didn t cause significant change or improvement. Many Americans also feared the increased power the federal government was taking. The Supreme Court ruled many New Deal programs unconstitutional for example, the NIRA (and with it, the PWA).

45 The Second New Deal (#25) In 1935, FDR and Congress created the Second New Deal, which focused on helping ordinary people (whereas the first New Deal had focused more on helping businesses & corporations, which would indirectly help regular people). The Second New Deal created the Works Progress Administration (WPA), National Youth Administration (NYA), Resettlement Administration, Rural Electrification Administration (REA), the Wagner Act, and Social Security. P.S. New Deal programs were often called the alphabet soup because so many were known by their initials.

46 Works Progress Administration was similar to the old PWA (which had been ruled unconstitutional): it did a lot of construction work, providing jobs for over 8 million people. One of the biggest New Deal projects was the WPA s construction of Ft. Peck Dam in eastern Montana. WPA also hired writers and artists to make pro- New Deal stories, books, murals, etc. The WPA

47 The National Youth Administration was a division of the WPA. It provided after-school jobs for millions of year olds so they could stay in school and get an education, but still make money to help their families. NYA jobs were often janitorial or cafeteria jobs at the students schools. The NYA

48 The Resettlement Administration Resettlement Admin. and later, the Farm Security Admin. gave more aid to farmers. Focused on migrant farmers who had been left out of aid provided by the AAA in the first New Deal. This was partly due to photographer Dorothea Lange s photos in Life magazine that showed the poverty of migrant farmers.

49 The Rural Electrification Administration eventually brought electric power to 98% of farms in the U.S. The REA later became the RUS (Rural Utility Service). The REA

50 The Wagner Act The Wagner Act gave labor unions more power, including collective bargaining and closed shops. Closed shop = only union members are allowed to work at a company with a closed shop. Unfortunately, unions back then were often racist and wouldn t let blacks join the union so the closed shop was often used to lock African Americans out of jobs! It also created the National Labor Relations Board (NLRB) to enforce the Wagner Act s rules.

51 Social Security The Social Security Administration was also created by the second New Deal in Social Security provides old-age pensions, survivors benefits for families where the father had died, unemployment insurance for those who lost their jobs, and aid for dependent children, the blind, and the disabled. Old-age pensions from Social Security typically start at age 65; in 1935, average life expectancy was only 58, so many never collected! Today, with life expectancy of 75-80, Social Security is much more expensive for the government to pay for.

52 FDR is Re-elected Even though the New Deal had not ended the Great Depression, FDR was popular because of his charismatic, caring public image, and the perception that he was doing his best to make things better. FDR was easily re-elected in 1936 over Republican challenger Alf Landon. Interestingly, Literary Digest, which had correctly predicted the last five elections before 1936, predicted that Landon would easily beat FDR! Why were they so wrong? Because of their flawed methodology they d sent their surveys to Americans listed as owning telephones & automobiles and most people still wealthy enough to own those things preferred Landon because A) they didn t need the New Deal they were still doing OK; and B) the New Deal had raised their taxes!

53 The New Deal s Critics One limitation of the New Deal was that the Fair Labor Standards Act did not cover many workers and set the minimum wage ($0.25/hr.) lower than what even low-paid workers were already making. New Deal didn t do much for women job programs hired men, not women, and the jobs not covered by the FLSA were mostly women s jobs. Agencies like the NRA (the Blue Eagle) had too much power one dry-cleaner went to jail for violating NRA rules by charging too little to press a suit!

54 African American Critics of the New Deal (#8) New Deal job programs (TVA, WPA, etc.) in the South were segregated white men hired first, blacks last (or not at all). African Americans were discriminated against & many got even poorer at this time. NRA rules made it harder for blacks to get jobs some said NRA really stood for Negroes Robbed Again! FDR & Congress did not pass an antilynching law. Discrimination in business continued. However, many African Americans still supported FDR because he appointed some blacks to government positions and because of his caring public image.

55 Political Critics of the New Deal Wealthy Americans opposed the high taxes and socialistic programs of the New Deal. The American Liberty League called the New Deal Bolshevism (communism); others considered the new deal to be fascist. Some feared assigning Social Security numbers could lead to militarized government that controlled citizens lives. Progressives & socialists said the New Deal didn t go far enough they wanted the government to take MORE control over business. And the New Deal had only had limited success in fighting poverty, anyway.

56 Some critics thought the New Deal s programs could result in communism or socialism. Why? (#29) Some critics thought the New Deal was taking too much control over the economy. They objected to limits on individual freedoms (like NRA rules that told business owners how much they had to charge their customers). Compared programs like unemployment insurance where people are paid for NOT working to communism. Some feared assignment of Social Security numbers was a first step toward a militarized society, like the Soviet Union, where the government kept track of and controlled everyone.

57 Famous Critics of FDR Louisiana politician Huey Long and Catholic radio priest Father Charles E. Coughlin both supported FDR at first but later turned against him. Fr. Coughlin used his popular radio show to criticize FDR & the New Deal, but was later shut down by the Catholic Church when he made anti- Jewish comments. Huey Long had a popular liberal-fascist movement called Share Our Wealth and planned to run as third-party candidate against FDR in 1936 but was assassinated in 1935.

58 The Death of Huey Long Long, nicknamed the Kingfish, was assassinated on September 8, 1935 by Dr. Carl Weiss, whose father-in-law was a judge who d lost his job due to Long s political gerrymandering in Louisiana. Weiss was immediately shot 61 times by Long s bodyguards & the police one account of the assassination is that Weiss only punched Long and then Long and Weiss were both killed by the hail of bullets from Long s bodyguards.

59 The Court-Packing Fiasco (#22) One of the things FDR was criticized most for was his attempt to pack the Supreme Court. Because the Court had found many New Deal programs unconstitutional, FDR wanted to appoint new justices (judges) who would support his policies in the future. One problem: federal judges serve for life, and FDR could only appoint a new one if an old one died or retired.

60 FDR s Court-Packing Plan (#22) Congress can change the size of the Supreme Court; FDR proposed that Congress increase the size of the Court from 9 justices to 15. FDR would get to appoint the 6 new justices, so he d pick ones that would support the New Deal. Congress refused to make the change, and many different groups criticized FDR s attempt to reshape the Court in his image so FDR had to back down. Still, the Court began to rule in FDR s favor more often, and FDR did get to appoint some new justices later (after older ones retired).

61 The FDR Recession (#21) Instead of getting better, the economy got even worse in 1937 this is called the Recession of 1937 or the Roosevelt (or FDR) Recession. Major reasons for the FDR Recession were the increased national debt and the new Social Security tax created in 1935, this tax took money out of workers paychecks. With less money to spend, workers couldn t buy as much, so businesses and the economy did worse.

62 Labor Unions During the Depression (#26) Labor unions grew in the 1930s and often went on strike for better wages & benefits. A new strike tactic was the sitdown strike, where workers stayed at their workplace but just refused to work since they were still there (in the way), management couldn t even bring in replacement workers. This sit-downer was at Flint, Michigan in In 1939, the Supreme Court banned sit-down strikes because they gave the unions an unfair advantage. Unions also had to beware of communists, who liked to infiltrate unions and cause strikes.

63 One hand washes the other As the New Deal promoted art, literature, radio, and movies, all became more popular and Hollywood often made movies like Wild Boys of the Road that promoted FDR & the New Deal. Even before FDR was elected, some in Hollywood did their best to help him get elected best example is the movie Gabriel Over the White House.

64 Gabriel Over the White House This 1932 movie was produced by William Randolph Hearst, who thought America needed a dictator to fix the Depression, and hoped FDR would become one. In the movie, Walter Huston plays a Hoover-like president who nearly dies in a car wreck & is visited by the Archangel Gabriel. He awakens a changed man fires his Cabinet (all big-business lackeys), declares emergency powers over Congress, legalizes liquor and then nationalizes the liquor industry (gangsters who resist are immediately executed), creates many New Deal-type programs, and threatens to destroy any country that owes money to the U.S. and doesn t pay its debts. The FDR-like president/dictator successfully ends the Depression, then dies he is eulogized after his death as one of the greatest presidents of all time. Before the movie was released, a copy was sent to FDR, who made suggestions for changes which were then incorporated into the film.

65 Legacy of the New Deal (#23, 27) Since the New Deal, people have expected more action from presidents and the federal government to solve problems, instead of allowing solutions to develop naturally some periodically suggest that we need a New New Deal. LBJ s Great Society is another example of this. Some New Deal programs still exist today the TVA, FDIC, SEC, Social Security, and others but most New Deal programs ended during WWII. The New Deal s greatest success: restoring hope to the American people.

66 Modern Criticism of the New Deal For several decades, there was little criticism of the New Deal by historians mainly because FDR was revered as a great president and it was off-limits to criticize him. Eventually, enough time passed that it became more acceptable to look at the New Deal critically and ask: But did it work? The answer was already known in 1939, FDR s own treasury secretary, Henry Morgenthau, said We are spending more money than we have ever spent before and it does not work. We have had just as much unemployment as when we started, and an enormous debt to boot.

67 Modern Critics: Shlaes, Cole, & Ohanian Amity Shlaes book The Forgotten Man says the New Deal failed because it interfered with the market s natural processes higher taxes & rules on producers created uncertainty about what gov t. would do next and made businesses unwilling to invest & hire more people. Harold Cole & Lee Ohanian (economists at UCLA)say some of FDR s policies made the Depression longer, not shorter they think it would ve ended by 1936, but FDR accidentally caused it to last until 1943 (when it finally ended during WWII).

68 Modern Critics: Powell & Kennedy FDR s Folly: How Roosevelt and His New Deal Prolonged the Great Depression by Jim Powell, and Freedom from Fear by David Kennedy, make the following criticisms: The New Deal didn t end unemployment it still averaged 17%. New Deal tripled federal taxes, made it more expensive for employers to hire people, discouraged new investments.

69 More from Powell & Kennedy FDR s 150+ antitrust lawsuits made it harder for employers to focus on business. FDR s bank holiday didn t just shut down weak banks it also broke up some strong ones. New Deal farm policies (AAA, etc.) destroyed food (wiped out 6 million farm animals & 10 million acres of crops) & made food more expensive at a time when many went hungry. Pro-FDR historians have focused on FDR s popularity & personality, not the actual results of his economic policies which weren t so good.

70 Final Criticisms of the New Deal The New Deal was supposed to end the Depression, but it didn t World War II did. In 1987, a similar stock market crash happened, but rather than create another New Deal, President Reagan took no government action and the economy recovered on its own and kept growing some say that if FDR (and Hoover) had the courage & patience to wait it out, the Great Depression may have similarly ended on its own.

71 Other Famous American Events in 1932: the Lindbergh baby kidnapping Bruno Hauptmann was later executed for the murder World Series: Babe Ruth s called shot home run. the 1930s

72 More Famous American Events in the 1930s May 6, 1937: the Hindenburg disaster: /watch?v=2yy0xw5r1ro. Of 97 on board, 35 died (plus 1 ground crew man). Herbert Morrison s Oh, the humanity! voice-over of the film footage is still famous. July 2, 1937: Amelia Earhart disappears while flying over the Pacific Ocean. October 30, 1938: Orson Welles broadcast of The War of the Worlds sends many Americans into a panic: /watch?v=ozc3fg_rrjm