What Do Jimmy Stewart and Bruce Willis Have in Common?

If you’ve seen the most recent Die Hard, you’ll know the premise of the movie is for the most part violence as entertainment for its audience. When Bruce Willis pauses from destroying a helicopter with a runaway car, however, he learns from younger compatriot Justin Long about the danger of a fire-sale. In the context of the movie the term refers to the American perception that the government has lost all control of technology and telecommunications, and are facing imminent danger. The real danger, as Long insinuates, comes from the ensuing panic by the American people (which then leads to society’s downfall, etc.).

Although the concept of a fire-sale appears new to Bruce, it contains vestiges of the economic distress experienced by Jimmie Stewart’s character in “It’s a Wonderful Life.” Both storylines revolve around the problem of snowballing panic in society, a subject that Paul Krugman addresses in his discussion of bank runs. As Krugman explains, “bank runs became self-fulfilling prophecies: a bank might collapse, not because there was a rumor about its investments having gone bad, but simply because there was a rumor that it was about to suffer from a run” (154). Perception, in other words, largely governs the outcome of the U.S. banking sector.

Perhaps this argument appears outdated, for the threat of “Potterville” is supposedly destroyed with the policies following the Great Depression on bank regulation. And yet the most recent crisis could have used more regulation. The housing crisis in 2007 can largely be attributed to the use of subprime loans. Their abuse has been attributed to a number of factors, from disengaged, corrupt CEOs to dishonest ratings on the value of homes. While in this instance the frantic American public poured investment into the economy rather than taking it out of banks as in the Great Depression, this frenzied behavior nevertheless led to a subsequent bust as homeowners began to default on their loans. Although we may not have Potterville, we now have instead neighborhoods undeveloped past their foundations.