Economy (1945-75) Flashcards
5
Describe evidence for post-war prosperity (1945-60)
- GDP in 1960 3x 1940 level
- Per capita income at $1450, twice as high as GB
- Urban Americans consumed 3k calories a day, twice that of Western Europe
- Home ownership expanded from 55% (1950) to 62% (1960)
- Federal Government spending in 1948 at $36.5bn, far exceeding pre-war level of $9.4bn
3
Describe evidence against post-war prosperity (1945-60)
- Acute poverty in South where rented accomodation was more common
- 1947, 33% US homes lacked running water
- Federal spending stimulated by Korean War involvement and Cold War armaments
7
List the causes of the age of affluence
- WW2
- Consumerism
- Cold War
- Presidential policies
- Investment in science and technology
- Housing construction
- baby boom
3
Describe how WW2 caused the age of affluence
- Stimulated industries such as electronics, aircraft, chemicals, food processing, etc
- Full and well-paid employment
- Compared with rationing, destructive bombing and debt issues in Europe and Japan
3
Describe the causes of consumerism
- by 1953, avg families annual income stood at $4k
- Diposable income had grown by 17% from 1945-53
- Advertising industry
6
Describe evidence of consumerism in the age of affuence
- Rise in consumption of goods
- Car industry
- Labour-saving devices
- By 1960, 87% Americans owned at least one TV
- American Express (payment card specialists) founded 1958
- rise in consumer credit debt
2
Describe the advertising industry in the age of affluence
- Advertised household appliances
- size of advertising industry grew from $6bn in 1950 to $13bn by 1963
3
Describe the rise in consumption of goods in the age of affluence
- Early 1950s, US consumed 33% of all global goods and controlled 66% of total global productive capacity
- e.g. 2bn hot dogs consumed in 1960
- Consumer credit debt rose from $9bn (1946) to $56bn (1960) due to hire purchase agreements
5
Describe the growth of the car industry in the age of affluence
- Sales rose from 69.5k in 1945 to 6.7m in 1950
- 75% owned car by 1960
- Industry dominated by Ford, General Motors and Chrystler
- number of 2-car families doubled between 1951 and 1958
- by 1958, more cars in LA than whole of Asia
- 1961, 350 different models for sale
3
Describe labour saving devices
- 1939-48, spending on housheold appliances rose 500%
- By 1951, 90% of US families had a fridge and 75% had washing machines and telephones
- Enabled greater female employment which grew for married women from 36% (1940) to 60% (1960)
1
Describe limits to consumerism in the age of affluence
- Boom caused many to avoid consumption in anticipation of another depression/panic, which never happened
4
Describe how the Cold War caused the age of affluence
- Bretton Woods Conference 1944 and Marshall Aid 1948 rebuilt European trade
- Korean War spending reached $30bn annually by 1953, equivalent to 14% of GDP
- By 1968, annual spending in Vietnam was $77.4bn
- Caused growth in high-tech undustries e.g. Boeing
5
Describe how Presidential policies caused the age of affluence
Note: much of this is indicative of examples
- GI Bill of Rights 1944
- Truman’s Fair Deal - raised minimum wage, house building, expansion of social security
- Ike - Interstate Highway
- JFK - Public Works Act, Manpower Development and Training Act, Telstra Act
- LBJ - ‘War on Poverty’ spending brought many out of poverty and into consumerist domain
3
Describe the GI Bill of Rights (1944)
- Provided free training and higher education to veterans
- Also allowed low interest rates for housing mortgages and business loans
- Led to construction boom
5
Describe investment in science and technology in the age of affluence
- Boom in chemical and plastics industry
- Inventions such as solid-state resistor accelerated computer development
- 1951, Stanford Industrial Park opened (now known as Silicon Valley)
- Eisenhower used federal aid to fund subjects important to Cold War struggle (e.g. science or maths) which helped related industries
- JFK increased NASA spending to get a ‘man on the moon’ which stimulated high-productivty growth
4
Describe housing construction in the age of affluence
- 1945 to 1955, 15m homes built
- Home ownership expanded from 50% (1945) to 62% (1960)
- Number of people living in suburbs grew from 17% in 1920 to 33% by 1960
- over 4k shopping malls in late 1950s compared with 8 in 1946
4
Describe the baby boom in the age of affluence
- 4m babies born each year 1954 to 1964
- Population expanded: 151.7m in 1950 to 180.7m 1960
- By 1964, only 40% of population has been born before 1946
- encouraged by labour-saving devices and expanded home ownership
2
Describe the effects of the baby boom
- By 1957, nappies were $50m a year industry
- stimulated higher production of children’s clothes and toys
How much did personal consumption expenditure rise by from 1945-64?
42%
3
Describe African Americans in the age of affluence
- Many escaped poverty, yet still disporportionate
- In 1947, 60% of black families lived below the poverty level compared with 23% of white families
- by 1964, 23% of black families lived below the poverty level, compared with 9% of white families
2
Describe the economic boom of 1968
- Unemployment unusually low at 3.3% in Jan 1969
- Yet inflation rising
3
Describe the cause of economic issues by 1970
- Natural economic cycle
- Cold War and Vietnam War spending
- Balance of payments deficit due to oil imports for industry
2
Describe Nixon’s policy of ‘Gradualism’
- Policy of monetary restraint to cool what advisors saw as overheating economy
- Aimed to restrict growth of monetary supply that had facilitated economic boom in LBJ’s last year in office
5
Describe the ‘Nixon Shock’ of 1971
- August 1971, held meeting of economic advisors at Camp David to address looming crisis
- Imposed freeze on wages and prices
- Raised tariffs on all imports
- Took US dollar off Gold Standard
- Devalued dollar by allowing floating exchange rates
2
Describe the positive impact of Nixon’s economic policy
- Reassured Wall St of stability in short-term
- US deficit relative to GDP fell to post-WW2 low of 24.6% in 1974
4
Describe the negative impact of Nixon’s economic policy
- End to Bretton Woods System and caused tension with OPEC and European allies
- High inflation in all Western economes, including US
- Helped provoke OPEC into sharp rise in oil price in 1973 (price of oil barrel quadrupled)
- Caused staglation
3
Describe stagflation in the 1970s
- By early 1974, inflation at 12%
- American industrial production decreased by 15%
- By 1974, unemployment rose to 9%
- Psychological effect of long petrol queues
4
Describe the limits to economic growth and prosperity post-war
- Significiant minority of Americans continued to live in poverty despite prosperity e.g. AA
- Older generation did not benefit as much from post-war economic boom
- 1960-61 recession forced JFK to promise to ‘get America moving again’
- Stagflation in 1970s
Consumer credit debt rose from (…) (1946) to (…) (1960) due to hire purchase agreements
$9bn
$56bn
