Stalin's leadership and actions taken

Stalin's leadership leading up to WWII was primarily made up of dismissing, arresting, and killing anyone suspected of treason, but more about that later. He had some other noteworthy actions that he took and decisions that he made:

Stalin and Hitler seemed to become pretty close, and I think they affected each others decisions during the start of WWII. Stalin and Hitler made secret negotiations in 1939 concerning Poland. Stalin had no interest in helping Poland, and Hitler wanted to crush them. Stalin was allowed to annex its eastern provinces, which was great because Stalin wanted control of the three Baltic States. the Nazi-Stalin pact was signed on August 23. 

Another important action of Stalin's was concerning the Spanish civil war. Stalin didn't want to support Spain in any way, and the Russians who had led the Russian effort in Spain were arrested, imprisoned and shot.

Although those two actions of Stalin's were certainly important, my questions are more about this next action:
Stalin was obsessed with conducting purges of 'enemies of the state' in 1937. Most of those enemies were charged with treason and spying, and were sent to execution,  prison or labor camps. Surprisingly, even Stalin's close friends were at risk, and many were accused of high treason. According to the reading, "Of the eleven non-Russian Republics of the Soviet Union, ten had their heads in government removed from office during 1937." Stalin appointed successors for the heads that were removed, but within a few months they were arrested, and also charged with treason. My question is, why would he appoint all these people and then go and arrest them a few months later? Was he so paranoid and suspicious that he couldn't trust anyone? Basically, what was going on in his head?!

Then, in 1938, the Trial of the Twenty-One occurred, which lasted 10 days, and was basically the height of all the other purges and show trials. 
"In the course of two years, according to the precise records of the Soviet secret police, 33,514 'enemies of the people' had been shot and 5,643 imprisoned." That's a lot of people!! Once again, I'm asking why he was so crazy psycho about killing all those people?

Podcast Question Post

After WWI, there was a huge surge in technological developments in many areas of the U.S.. For the military, new "Tommy guns" were created. The first color motion picture appeared in 1922 for Americans to enjoy in their free time. For farmers, the mule drawn cotton stripper was invedted to make cotton harvesting easier. New technology was being invented across the country, and virtually all of America was giddy with the excitement of finishing the war and being so fortunate. What I'm wondering is, did those developments cause Americans to become overconfident with their situation? Did that lead to the Great Depression because they never expected the stock market to decline so suddenly? Did that element of surprise make it seem like the Depression hit even harder?