Film Theory: Don't Trust The Banks! (Disney's Mary Poppins) - YouTube

You know Mary Poppins spends a lot of time talking about how great supercalifragilisticexpialidocious is,

but really downplays its critical role as a pickup tool.

In the movie, one of the characters specifically says

"One night, I said it to me girl, and now me girls me wife!"

Get on it all you Tinderites, forget your instagrammy photos

and talking about your favorite place to eat avocado toast.

It is all about plastering Supercalifragilisticexpialidocious all over your profile!

That stuff is dating gold!

*Film Theory theme*

Hello Internet!

Welcome to chim-chiminey chim-chiminey film-Film Theory!

We analyze movies to the highest degree!

That's right friends, the remake of Mary Poppins is out now,

and it's given Lin-Manuel Miranda-ites some new tracks for their Spotify playlist.

And, in honor of the punchy new Mary Poppins remix,

today we're taking a look back at the original "Mary Poppins" back from 1964.

Yeah, it is really that old.

On a personal note,

I just finished watching every Disney movie from the Disney deaths trilogy we're in the middle of,

and let me tell you,

not everything in that Disney Vault stays fresh forever.

"Make Mine Music",

"Song of the South".

Hoo-hoo boy, those have not aged well!

But I think it's safe to say that Mary Poppins is just one of those timeless movies that holds up.

From 1964, to the time four-year-old MatPat danced "Step In Time" around my house in my underwear.

Thought I was a chimney sweep, it was awesome.

It was definitely four-year-old MatPat and definitely not fourteen-yearold MatPat!

By fourteen, I put on a shirt!

Anyway, as much as this movie is one of my favorites of all time,

There is one thing that's always made me wonder- who was right about the tuppence?

Now, in case you've forgotten the plot of Mary Poppins,

and, by proxy, your soul, let me refresh you so you know what I'm talking about.

Mr. Banks, the stodgy banker,

and Mrs. Banks, the airheaded suffragette,

have Jane and Michael, their two adorable children.

"Adorable, well that's debatable, I must say!"

Their musical nanny, Mary Poppins, takes them on whirlwind adventures and teaches them life lessons,

like making sure you step on other people's chalk drawings without paying them,

and treating medicine like candy.

"Lime cordial, delicious!"

"Strawberry, mmm!"

One day, in a totally passive aggressive move against their father for almost firing her,

she sends the children to the bank with him,

and uses psychological manipulation to convince Michael that he should donate his two pence, or tuppence,

to a beggar woman who sells birdseed.

What an impertenent thing to say!

Me, putting ideas into people's heads? Really!

His father warns him about pigeon disease or something,

and instead twists his arm to do the responsible thing and invest his tuppence in the bank,

so that it gains compound interest.

Yeah, try explaining that one to a five-year-old!

when they get to the bank, a bunch of really intense bankers grab his change,

and Michael yells:

"You give back my money!"

Which spooks other patrons in the bank to start asking for their money,

"The bank won't give someone their money!"

"Then give me mine, too!"

This tuppence causes a run on the entire bank,

which results in Mr Banks getting fired,

and ultimately having a crisis of conscience.

In the end, Banks comes to his senses and uses the tuppence to buy a kite and fly it with his son.

Everyone goes to the park for the most unbelievable scene in the entire movie,

where like, fifty people are all flying kites at the same time,

and none of them are getting their strings tangled up.

TLDR: This tuppence plays a massive role movie,

and apparently on the entire banking system of Great Britain.

So given the incredible importance of these two pennies, I can't help but ask:

Did Michael make the right call?

After all, the bankers might be boring and a little bit handsy,

But they do make a valid point: you can invest your money rather than buying birdseed,

so you can be rich and happy later,

all while contributing to the major world industrialization like:

"Railways through Africa!"

"Dams across the Nile!"

"Fleets of ocean greyhounds!"

Wow, I mean, two cents don't buy what it used to, I guess!

You don't have to be Einstein to figure out that compound interest can be a powerful force

Even the quote: "The most powerful force in the universe is compound interest" is frequently attributed to Albert Einstein.

But as boring as investing might be, it seems to have worked well for the bankers.

So who was right?

What should Michael have done with the tuppence?

Given that Mary Poppins is set over a hundred years ago, back in the year 1910.

It's grand to be an Englishman in 1910,

King Edward's on the throne,

It's the age of men.

We have a huge runway to actually accumulate interest.

So we really get to see how this plays out,

and determine whether Michael should have trusted in the bank,

and what that tuppence would actually be worth today.

And the results are surprising!

Figuring out the answer to this seems like it should be simple,

you just perform some basic interest calculations.

But two pennies way back then turns out to be a lot more complicated than you'd first think.

In 1910, Britain had a ridiculously complex money system,

involving words that sounds silly to modern U.S. viewers.

Things like "Farthings" and "Shillings"

It's like fairytale money, right?

Well, not back in 1910, when one pence was actually worth one 240th of a pound.

Which would be like us having some coin that was worth a few tenths of a penny.

The long story short, this system of currency is silly.

But, we gotta use it if we're gonna get ourselves an accurate calculation.

Luckily in 1971, Britain shifted over to a base 10 system like we have today.

Probably because no one in the world could figure out how much a candy bar cost over there

So Michael's tuppence is actually worth .08333333 repeating pounds.

Which is a little over 11 cents in today's terms.

So that's gonna be our starting number.

In 1910, the British interest rate on a normal savings account was 3.5%,

which, by today's standards, is great.

But it turns out to not be all that helpful for Michael.

At 3.5% interest, Michael's deposit will earn him a whopping .56 farthings,

which again is a meaningless number,

but suffice it to say, it is really, really small.

The farthing is 1/4 of a pence (or penny, the two are interchangeable).

The name actually comes from "four-thing".

The pence is fourth, hence the name "farthing".

Anyway, the farthing was the smallest unit of currency in Britain.

So Michael earned less than one of the smallest form of currency Britain had at the time.

And so, what do you think the bank does when you earn

less than one of its smallest currency in the year that you have to earn it?

Well, they round down.

And when you stop and think about it, that actually makes sense.

If they didn't, they would in essence be creating new money out of thin air and giving it away,

if they were to round those partial cents up.

So, poor Michael, who didn't read the fine print when he invested, actually earns zero interest in his first year.

But okay, that's one year out of a hundred and eight years.

Except that's exactly what happens every single year over, and over, and over again,

where the interest rate never gets high enough for Michael to even earn a single farthing.

In short, as insane as it sounds, Michael's balance never grows larger than tuppence.

Never!

Two pennies for a hundred and eight years!

That's the thing about compound interest,

it only works if your interest each year is gonna be greater than zero.

At the end of this analysis, I feel bad for the guy!

"No, I want it to feed the birds!"

I know buddy, that's all you wanted to do!

So I decided to test out some more optimistic scenarios,

to see if we could at least get him any return out of this deal.

Let's say that there was a way for him to earn some interest.

Like if his tuppence were part of a bigger bank account.

How much would his tuppence earn if there was no rounding and it just accrued interest slowly?

Again, using Britain's incredibly well documented historical interest rates,

we can calculate all this out from 1910 to 2018,

and come up with Michaels new hundred year old fortune of...

two pounds and eleven pence.

*The Price Is Right Losing Horns*

It's the equivalent of two dollars and seventy cents for all the Americans in the audience.

Doesn't look like Michael's gonna be taking you on any shopping sprees to Harrods anytime soon,

but on the bright side, Michael's Great-grandson can buy himself

a bloke-Coke and a bag of Maltesers from the Tesco!

So, at this point, I was like

"I guess the lesson here is that banks will rip off your tuppence,

and Michael would definitely have been better off buying birdseed,

rather than holding out over a century to buy a Jaffa Cake and a bottle of water!"

It seems like this was clearly a scam,

but there is one last avenue to explore here: the wide world of investments!

"When we get to the bank, I shall show you what may be done with your tuppence."

"And I think you'll find it extremely interesting."

As the bank says, Michael's money could be part of global initiatives, like:

"Majestic self-amortizing canals!"

Whatever the heck those are!

Michael certainly doesn't seem to know!

"O, it fires the imagination!"

Mr. Dawes, the bank's ancient founder, extols Michael on the virtues of all kinds of ventures,

like foreclosures, dividends, shares and debtor sales.

some of these actually being really risky investments.

But hey, this is in 1910!

England's financial markets are soaring, London is the economic capital of the world.

The UK has a 3 percent unemployment rate.

It seems like a great time to invest.

And it was.

Until 1914, when a little something you might have heard of happened: World War I.

When the Great War, or World War I set in,

much of the private industry fueling Britain's financial dominus ground to a screeching halt,

as a huge portion of resources were reallocated to manufacturing munitions,

and all the other things that it takes to run a war.

The specific industries that Mr Dawes mentions in the song: shipyards, the mercantile, tanneries and collieries,

(which, I had to look up, and are apparently coal miners)

reallocated funds and manpower to build for the war effort,

all while losing their top men to be sent into trenches across Europe.

But the British people were no dumb crumpets during this time.

They sense that all this war was destabilizing the economy,

and they did what everyone else does when they feel insecure about their finances

They took all their money and they stuffed it into mattresses.

They began to withdraw money from the banks,

which, in turn, led to fears that there would be a bank run.

If everyone saw the economy in decline and then rushed to withdraw their money,

there literally wouldn't be enough banknotes in the country

for everyone to have all their money back in cash.

In response, the British Treasury began to print more cash at a rate of 5 million new banknotes a day.

This is a common thing to do in war times,

and if you want to see how it usually goes,

you can check out this Game Theory episode will recover exactly that,

but I'm gonna spoil it for you - it never ends well.

When you start literally printing money and injecting it into the economy,

any economist can tell you what happens - inflation.

Every new banknote that gets printed effectively devalues all the money that currently exists.

It's the reason that the government can't just solve its debt problems by printing more money.

And so what does that mean for Michael?

Well, it means during the war, instead of his investment growing,

his tuppence is actually losing value, and by proxy, buying power, the whole time.

Fortunately,there was still one investment opportunity available: war bonds.

At the time, this would seem like a good financial move.

War bonds had an interest rate of 5%,

several points higher than the market interest rates of the time,

and banks and citizens alike were encouraged to buy war bonds as a part of doing their patriotic duty.

They were also considered safe because they were backed by the British Treasury,

rather than a business that can go under,

so bonds are considered one of the lowest risk investments that you can possibly make.

Fun fact, by the way:

It's the same reason that China is really gung-ho about buying US Treasury bonds these days.

They're the most reliable investment that you can buy.

"Ooooh yeah!"

So we have ourself a safe investment with a high interest rate, all while supporting the war effort.

Buying war bonds seems like a win-win for everyone involved,

and even seems to align with Mr. Dawes' strategy for investing all the bank money

So how does this last-ditch effort to make any sort of money out of Michael's tuppence work out?

Unfortunately yet another tough lesson in history for ol' Mike Banks!

A decade after the war in 1929, the world gets hit with the Great Depression.

Remember all those war bonds that got that fantastic 5% interest rate?

Well, the government didn't pay those back yet.

And in 1932, Chancellor Neville Chamberlain called for investors to do their patriotic duty yet again.

Only this time accept a 3.5 percent return instead,

with the overwhelming majority of war bonds just changing over to that new rate.

I am altering the deal: pray I don't alter it any further.

Darth Vader might not have changed his deals again, but Neville Chamberlain absolutely did.

The British government converted the war bonds from bonds, into what's known as "perpetuals".

Perpetuals that give the government the right to not pay back the loans if they so chose.

Hmmm!

What once was a very safe investment with a solid interest rate that helps support the war effort,

then became an IOU that you can either choose to pay back or not to pay back.

Guess which one the British government chose

Surprise, surprise, surprise!

No effort has been made since the 1930s to repay any of those war bonds.

It's believed that about a hundred and twenty-five thousand people are still holding on to their bonds,

some of whom might have inherited them from parents or Grandparents who bought them during World War I,

still nothing paid out.

Borrow money from people to pay for the war,

and then just decide afterward that - you're not gonna pay it back!

That sounds like a great deal for the British government,

and not such a great deal for Michael and his investment portfolio.

"The worst trade deal maybe ever signed anywhere!"

But definitely a pretty bad deal except maybe for that time when Neville Chamberlain said

"Hey, Adolf! We'll totally let you take over Czechoslovakia.

If you promise not to attack us once you're done taking over the rest of Europe!"

Yeah, we're talking about that Neville Chamberlain.

Made a lot of bad calls.

So clearly Michael dodged a bullet by hanging on to that tuppence.

But how about where it really ends up - buying kite fixing materials?

Was that the right choice?

As it turns out in what I'm sure was a complete accident on the part of Disney, it absolutely was.

With tuppence for paper and strings, you can have your own set of wings!

Mr Banks was able to purchase both paper and string for tuppence in the movie,

whereas to buy those items today would cost you between five and ten British pounds!

(Depending on the specific paper and string you're buying)

And yeah, I know that sounds expensive,

but there was literally a paragraph in an earlier version of the script dedicated to pricing out the grades of string and paper,

so just be glad that I cut it down to the chase with this one.

Even in our best case scenario,

there was no way Michael would have been able to buy kite making materials in 2018 with the money from that tuppence.

So in short, after a long harrowing journey to get here,

Yes Michael, you made the right choice to spend your tuppence in 1910,

and it turns out that flying your kite with your dad isn't just a cathartic family moment,

but also a sound financial decision.

But hey, that's just a theory.

A Film Theory!

Aaand...

Seriously, this new Mary Poppins movie had better be good, because my entire childhood is on the line.

This is not a joke.

I'm warning you, Lin!

Bert has been my hero for years.

If your Cockney accent is not as bad as Dick Van Dyke's, I will be sorely disappointed.