Eisenhower's Consumer Society

Question 1

How did the economy grow under Eisenhower?

Answer 1

• 1950: GDP $355billion - 1960: GDP $488billion
• wages rising, hours falling and per capita income rising
• 1950s: economy grew by 37%
• by 1960: typical American family had 30% more purchasing power than at the beginning of the decade
• inflation kept low because of E’s obsession with balancing the federal budget, and his regime of low taxes and increases in public spending kept the economy healthy
• cheap oil from US wells kept the industry running and slow recovery from overseas competitors kept the US as the major supplier of manufactured goods worldwide

Question 2

How did media and advertising grow under Eisenhower?

Answer 2

• those who came of age in the 50s became consumers
• purchasing powers driven from advertising, which grew from $6billion annually in 1950 to $13billion in 1963
• Robert Sarnoff - President of the National Broadcasting Company - “advertising is the foot on the accelerator, the hand on the throttle”
• businesses converting plants which previously made military equipment to produce consumer goods
• increase in TV sales
• politicians used advertising techniques more effectively

Question 3

How did loans lead to a building boom?

Answer 3

• Federal Housing Administration and the Veteran’s Administration offered low-interest loans to allow families to buy new homes
• building boom followed, with large suburbs such as Levittown being built
• mass production of housing for 80,000 Americans at cost of $8000 per home
• however, Levittown operated restricted covenants meaning African Americans couldn’t buy property there

Question 4

What led to the increased availability of credit and what did it result in?

Answer 4

• cheap credit helped by first credit card, released in 1950 by the Diner’s Club
• as a result, private debt doubled by 1960, as consumers borrowed to buy cars, fridges, TVs and vacuum cleaners
• growth in debt further stimulated the economy and created jobs in manufacturing

Question 5

What was the impact of the baby boom?

Answer 5

• explosion in sales of baby food, toys, nappies etc.
• late 1950s: first boomers entered their teens and became a whole new demographic
• Life Magazine described them as a “$10 billion power” in 1959

Question 6

What was the impact of the consumer society?

Answer 6

• 1960: Americans owned nearly half of cars and phones in the world and 90% families owned a TV
• cheap gasoline from domestic production allowed car sales to jump from 5.1mil vehicles per annum in 1949 to 7.9mil in 1955
• Interstate Highway Act further stimulated demand and jobs
• 1959: Nixon v Khrushchev ‘Kitchen Debate’ in Moscow on capitalism vs communism
• E arranged for Khrushchev to take a helicopter ride to observe the success of the US economy - K returned to demand a rapid increase in production of consumer goods in the USSR

Question 7

How did entertainment and leisure develop under Eisenhower?

Answer 7

• live sport and music became more popular (helped by TV)
• expense of cinema which declined until 1980s
• exception was Disney - incredibly popular
• first Disney park opened in 1955 - contributed to growth of toys and games in consumer items
• rapid development of the fast food industry - Mcdonald’s and Burger King popularised drive through dining

Question 8

What were limitations of the consumer boom?

Answer 8

• Michael Harrington’s book ‘The Other America’ exposed that 1/4 still lived in poverty
• minor recession in 1954
• more serious recession in 1958 - 5million Americans unemployed and production fell by 14%
• however, unemployment and inflation remained low on average