- Created by: lwilson23
- Created on: 04-02-19 18:46
The US economy pre-Wall Street Crash
- the state of US economy follows a cyclical pattern. Unrealistic confidence - realisation that investment at this level is unsustainable - uncertainty - panic - realignment of expectations - confidence restored based on fact and hope.
- WWI sparked economy - but industrialisation led to a post-war economic slump due to over-production and machines taking the place of workers. Less demand so less profit.
- Republican isolationist policy led to money being spent in America - ROARING TWENTIES. 1919-1921 (decline), 1921-1929 (good times). Roaring Twenties were doomed to fail - unsustainable.
- 'Fordism' led to economic improvements - with Ford reducing unemployment and caring for his workers (taught immigrants English, bagged workers a car with 'The Ford Plan' etc.)
- loans and buying 'on credit' along with an increased focus on consumerism sparked economy.
- the BULL market of the stocks and general unsustainability in high spending caused the crash.
The US economy post-Wall Street Crash
- TGD was bad...very bad. FDR's New Deal racked up massive federal debt but saved the country, at least in the short term.
- WWII - unlike WWI - was followed by economic BOOM TIME, factories easily transformed - jobs were available and consumerism was seen as patriotic. Aviation tech also advanced.
- the 1944 BRETTON-WOODS SYSTEM meant that the dollar was now the most POWERFUL currency in the world - more stable than the pound!
- general complacency surrounding spending in the 50s led to inflation and stagflation becoming an issue in the later decades.
- the various oil crises which plagued the 1970s meant price of fuel quadrupled during the 1973 Arab-Israeli war and again in 1979. Knock-on effect on businesses - forced to close.
- both Ford and Carter were crippled by economic strife - with Reagan being America's 'hero'.
Key Economic Acts in the USA
- 1933 NATIONAL INDUSTRIAL RECOVERY ACT - part of FDR's New Deal - allowed regulation of industry - fair prices and wages.
- 1938 FAIR LABOR STANDARDS ACT - introduced 40 hour working week - more leisure time.
- 1949 HOUSING ACT - Truman provided low-rent public housing.
- 1964 ECONOMIC OPPORTUNITIES ACT - training and work schemes for unemployed youth, also set up 1000 Community Action Programmes (CAPs) in deprived areas to help.
- 1965 MEDICARE ACT - guaranteed older people free medical care paid for by social security payments - also set up Medicaid which provided free medical care for those on welfare.
- 1969 TAX REFORM ACT - raised lowest tax rate - exempting 9 mil poorer families from tax.
- 1971 EMERGENCY EMPLOYMENT ACT - created 'Community Service' for two years - an aim to get the unemployed (particularly Vietnam vets) into work.