{"id":12272,"date":"2020-03-25T10:00:41","date_gmt":"2020-03-25T17:00:41","guid":{"rendered":"http:\/\/victorhanson.com\/wordpress\/?p=12272"},"modified":"2020-03-25T17:35:44","modified_gmt":"2020-03-26T00:35:44","slug":"the-logic-of-pottersville","status":"publish","type":"post","link":"https:\/\/victorhanson.com\/wordpress\/the-logic-of-pottersville\/","title":{"rendered":"The Logic of Pottersville"},"content":{"rendered":"\n

Victor Davis Hanson \/\/ National Review<\/p>\n\n\n\n

In director Frank Capra\u2019s 1946 holiday classic movie It\u2019s a Wonderful Life<\/em>, an initial bank panic sweeps the small town of Bedford Falls. Small passbook account holders rush to George Bailey\u2019s family-owned Bailey Building and Loan to demand the right to cash out all of their deposits \u2014 a sudden run that would destroy the lending cooperative and its ability to issue mortgages or preserve the savings accounts of the small town.<\/p>\n\n\n\n

The villain of the story, Henry F. Potter, who is a cash-laden, though miserly rival banker, played brilliantly by Lionel Barrymore, offers to buy up the depositors\u2019 shares in the Building and Loan \u2014 but at a steep 50 percent discount.<\/p>\n\n\n\n

Bailey (Jimmy Stewart) tries to explain to his panicked cooperative depositors the logic of their frenzy, with the exclamation, \u201cPotter<\/em> isn\u2019t selling<\/em>. Potter\u2019s buying<\/em>! And why? Because we\u2019re panicky, and he\u2019s not<\/em>.\u201d<\/p>\n\n\n\n

Capra\u2019s post\u2013Depression era movie, even in its black-and-white morality, reminds us that, in crisis, the majority has limited liquidity and cash. And sooner rather than later they must sell assets \u2014 property, stocks, shares, and household goods \u2014 to operate their businesses or keep their homes until things pick up. In a real depression, those with the least cash fail first and in great numbers.<\/p>\n\n\n\n

And the minority who do have cash are always willing to buy, even in a depression, albeit at their price, which is usually steeply discounted. Panic, not logic, eventually takes over the collective mind, as we now see with the downward spiral of the current stock market and the hoarding of goods otherwise in plentiful supply.<\/p>\n\n\n\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Victor Davis Hanson \/\/ National Review In director Frank Capra\u2019s 1946 holiday classic movie It\u2019s a Wonderful Life, an initial bank panic sweeps the small town of Bedford Falls. Small passbook account holders rush to George Bailey\u2019s family-owned Bailey Building and Loan to demand the right to cash out all of their deposits \u2014 a sudden run […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[1],"tags":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p466Sb-3bW","jetpack_likes_enabled":true,"jetpack-related-posts":[{"id":2878,"url":"https:\/\/victorhanson.com\/wordpress\/dr-obama-first-do-no-harm\/","url_meta":{"origin":12272,"position":0},"title":"Dr. Obama: First, Do No Harm","author":"victorhanson","date":"March 24, 2009","format":false,"excerpt":"by Victor Davis Hanson Tribune Media Services When it comes to our complex economy, President Barack Obama would do well to heed the physician's ancient commandment to first \"do no harm.\" Instead, Obama's administration has been prescribing all sorts of multibillion-dollar borrowing remedies without any consistent diagnosis of what is\u2026","rel":"","context":"In "March 2009"","block_context":{"text":"March 2009","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/archives\/2009\/march-2009\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3625,"url":"https:\/\/victorhanson.com\/wordpress\/the-new-penance-doesnt-offset-much\/","url_meta":{"origin":12272,"position":1},"title":"The New Penance Doesn’t Offset Much","author":"victorhanson","date":"May 21, 2007","format":false,"excerpt":"by Victor Davis Hanson Tribune Media Services What do leftist, mostly secular elites\u00a0share with medieval sinners? They feel bad that the way they live sometimes doesn't quite match their professed dogma. Many in the medieval church were criticized by internal reformers and the public at large for their controversial granting\u2026","rel":"","context":"In "May 2007"","block_context":{"text":"May 2007","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/archives\/2007\/may-2007\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2442,"url":"https:\/\/victorhanson.com\/wordpress\/what-if-the-president-liked-businesspeople\/","url_meta":{"origin":12272,"position":2},"title":"What If the President Liked Businesspeople?","author":"victorhanson","date":"August 16, 2011","format":false,"excerpt":"by Victor Davis Hanson Tribune Media Services The US stock market has nose-dived. 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Most of America's private retirement 401(k) accounts have significantly decreased in value since last autumn's crash. Home equity has plunged. The unemployment rate is above 7\u2026","rel":"","context":"In "March 2009"","block_context":{"text":"March 2009","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/archives\/2009\/march-2009\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3316,"url":"https:\/\/victorhanson.com\/wordpress\/failure-is-very-much-and-option\/","url_meta":{"origin":12272,"position":4},"title":"Failure Is Very Much and Option","author":"victorhanson","date":"April 24, 2011","format":false,"excerpt":"by Victor Davis Hanson NRO's\u00a0The Corner Lost in the furor over the\u00a0budget\u00a0is any discussion of the fact that, after a certain baseline point, redistributive payouts might be making things worse for those on the receiving end. Black middle-class flight from northern big cities, failing public schools like nearby Fresno City\u2026","rel":"","context":"In "Budget"","block_context":{"text":"Budget","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/politics\/budget\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4039,"url":"https:\/\/victorhanson.com\/wordpress\/this-old-house\/","url_meta":{"origin":12272,"position":5},"title":"This Old House","author":"victorhanson","date":"March 27, 2006","format":false,"excerpt":"by Victor Davis Hanson Tribune Media Services I\u00a0live in a central California farmhouse built by my great-great-grandmother in the 1870s. But if the clapboard house looks more or less unchanged from its earliest photographs taken in the 1920s, the world down the road is unrecognizable. In 1890, my grandfather was\u2026","rel":"","context":"In "March 2006"","block_context":{"text":"March 2006","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/archives\/2006\/march-2006\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts\/12272"}],"collection":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/comments?post=12272"}],"version-history":[{"count":1,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts\/12272\/revisions"}],"predecessor-version":[{"id":12273,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts\/12272\/revisions\/12273"}],"wp:attachment":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/media?parent=12272"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/categories?post=12272"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/tags?post=12272"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}