1.4 Flashcards
Post WWI Depression
Brief depression following WWI as war production stopped
Farming - Following war produced too much and prices fell as during war production increase due to subsidies and demand
Industry - Strike during 1st Red Scare.
- Coal industry suffered 1900 coal responsible 90% energy fell to 60% by 1930
Govt. - Republican laissez-faire so did not do anything and tariffs led to tariffs from other countries
1920s Boom
Massive boom during the 1920s due to mass production, hire purchase and other things
1917 4,727,468 cars and by 1929 23,060,421 (Ford Model T)
Consumer debt rise from $3.3 billion to $7.6 billion from 1920-1929
1929 Wall Street Crash
Demand fell and companies did not reduce production and products piled up in warehouses and unemployment began to rise
By September 1929 some investors sold their shares predicting the prices to fall and so more did and prices crashed. People were scared and so began to sell shares causing larger crash than expected
By 1933 one-third of all banks were bankrupt
Great Depression
Vary large unemployment and many people who had debt could no longer pay It back and so further depression. Government did not do much initially.
12,830,000 people (24.9% of workforce) unemployed in 1933
Post-WWII (Economy)
WWII had helped bring the US economy out of depression and the affluence continued afterwards
- Production increased from $213 billion-worth of goods in 1945 to $284 billion-worth in 1950, which helped keep unemployment low.
- The government came down hard on strikes . When rail workers walked out (marooning 90,000 passengers and stopping 25,000 goods trucks, many loaded with perishable food), he asked Congress to draft strikers into the army.
- Even some farmers managed to do well, thanks to continued farm subsidies and the demand for farm produce at home (as consumers spent more on food) and abroad (especially in war-torn Europe).
- Government spending rose steadily throughout the period under Truman’s ‘Fair Deal’ policies. Immediately after the war, the government provided support for all those leaving military service. This included a leaving payment, unemployment pay for a year, loans to buy a home or business, and medical and health care. It also provided education or training through the GI bill (over 12 million did this)
Baby Boom
Post war growth in rate of baby being born led to great growth in demand for baby items.
1961 toy profits were $2 billion up from $1.6 billion in 1956
Between 1955 and 1964 there were over 4 million births each year
These babies would eventually need schools and colleges increasing demand for items for schools
Suburbs
Increased demand for the production of houses and also required the growth of the intestate system
Money Supply
The government wanted to keep the money supply up to hold inflation down. To do this they increased the money supply from $169.7 billion in 1952 to $215.8 billion in 1960
1960s
USA lost its place as worlds biggest exporters as a result of events such as the Vietnam war draining govt financing. Inflation was also still rising and govt didn’t want to keep increasing money supply as this affected the value of the dollar
1970s
Stagflation - A combination of prices not falling but business stopped expanding and so people became significantly worse off
Fall of USA’s importances as world technological leader helped cause this with the his of the UK, Japan and Germany contributing.
Government was too afraid of poor public reaction to adequately deal with these problems
Energy problems
- In the 1973 Arab-Israeli War, the Organisation of the Petroleum Exporting Countries (OPEC) supported Palestine. OPEC put up prices by 70 percent and then embargoed oil exports to the USA and other countries that supported Israel. It kept prices high even after the war ended. By January 1974, world oil prices were four times higher than before the crisis. Fuel prices never returned to earlier levels.
- In 1979, there was another fuel shortage, from May to July. Shortages were as bad as in 1973, although, as it only lasted three months, there was no fuel rationing. However, there were worries about a heating fuel shortage that winter.
Lack of Confidence
Unemployment rose 5.8% in 1978 to 7.1% in 1979 and people were less confident and so spend less
Carter addressed this in a speech to public which did not help and so did not gain their support
Home Ownership
Increased from 6,700,000 in 1920 to 15,200,000 in 1940 indicating a rise of standards of living.
Retain chains
1929 retain chains sold 21.9% of all goods in the US and continued to grow.
Food
People spent less proportion of their wage of food in 1940 then 1930 (21.1% to 23.9%) agains showing standards of living had clearly risen
Health and Education (Pre-1940s)
Health was improving as govt spent more on healthcare (Up from $3,100,000 in 1917 to $32,700,000 in 1940)
More people were in school in the 1940s than in 1917
- Of children aged 14-17 up from 27.1% to 73%
Life at bottom
Not all people gained in standards of living as some farm workers and black and women workers did not earn as much as white men
Impact of WWII (Standards of Living)
The war made people stop spending and industry changed to war production
Following the end of the war production quickly switched back to peacetime goods
After years of rationing people were very willing to spend and a consumer society emerged
Consumer Society
A society in which the buying and selling of goods is the most important social and economic activity. The USA developed one following the end of WWII
Impact of TV (Standards of Living)
By 1960 85% of homes had a TV which meant that people went out less
It led to increased use of ads on TV and the development of other products such as ‘TV Dinners’
Targeting Consumers
Manufactures began to target consumers based on what products they would want including showing ads for kids toys during kids programmes
Teenagers
By 1950s teenagers were a very important group of consumers worth about $10 billion in 1959.
Most of this was spent of transport (more teenagers had cars), clothes, food, drink and entertainment
1960s wealth gap
The wealth gap had increased during the 40s and 50s with the top 1% controlling 26% of wealth by 1956
This continued to grow into the 1960s
Poverty
By 1966 12% of white Americans and 41% of non-white Americans were living under the poverty line showing the problems facing the non-white Americans
Many of them moved to the city were the housing was not very good and eventually it led many to fall into crime and drugs in the 1970s
