Why was there an Econmic Boom in the US in the 1920's?

Govt. Policies: High Tariffs: Fordney - McCumber

Legal act passed in 1922
The act raised tariffs to cover the difference between domestic and foreign production costs
It became cheaper to buy domestic goods in almost all cases
Foreign imports became more expensive. Even if they were cheaper to produce.
This reduced the level of foreign trade.

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Federal taxes were reduced significantly in 1924, 1926 and 1928
This mainly benefitted the wealthy
Mellon handed out Tax reductions of $3.5 billion to industrialists. However, Coolidge's Government still operated on a surplus.
The Aim was to reduce national debt
But this meant little to those who were still too poor to pay federal tax

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The Motor Industry was developed by the Model T Ford: It was sturdy and simple to build, so it was the perfect candidate for mass production.
The impact was that new production techniques developed and the car became popular
The growth in ownership of the Model T meant money no longer needed to be spent on advertising because it already marketed itself.
Growth in electrical goods, i.e. the radio, meant a growth in advertising.
Growth in electrical goods such as the vacuum cleaner allowed women who could not afford maids to do their own domestic chores.

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Management science and Taylorism stated that more production work could be done in shorter periods of time than before.
This helped the boom because it enabled supply to meet demand.
Advertising was used to create this demand because it exploited people's need for a glamorous lifestyle.

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The availability of easy credit fuelled the boom because people could buy things "in good faith" (Buy now, pay later in small installments)
This also included loans to buy stock (Call loans)

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