T7 Economic Flashcards
1
Q
The Post War Boom
A
- The economic problems that often follow wars were not repeated in the USA in 1945.
- The US economy grew significantly during the war. Gross National Product (GNP) had risen 35% since 1941.
- The USA had seven per cent of the world’s population but possessed 42% of global income.
2
Q
GI Bill of Rights (1944)
A
- The Government had passed the GI Bill of Rights in 1944 offering grants to veterans to improve their education, learn new skills or set up businesses.
- Eight million veterans took advantage of this measure.
- All former combatants were to receive $20 per week while looking for work.
- In fact, less than twenty per cent of the money set aside for this was actually distributed because so many jobs were available for returning veterans.
- Universities expanded considerably to accept former servicemen whose fees were paid by the Government.
- The University of Syracuse, for example, trebled its number of students.
- The GI Bill also offered low-interest home loans that allowed ex-servicemen and their families to move to new houses in the suburbs.
3
Q
Post-war Prosperity
A
- Per capita income at $1,450 was almost twice as high as Great Britain.
- Urban Americans consumed about 3,000 calories per day, about 50% more than most people in Western Europe.
- The federal government spent more – $36.5 billion in 1948, admittedly significantly less than the $92.2 billion expended in 1945 but considerably more than the $9.4 billion of 1939.
- This figure was to rise significantly in 1950 with the onset of the Korean War and a massive defence budget in the 1950s and beyond. States, meanwhile, spent more on roads and schools.
- Economic expansion created greater employment opportunities in many industries, for example aircraft production, chemicals and electrical goods.
- As consumer tastes changed, processed food production made huge gains.
- Tobacco companies made vast profits and employed many people.
- As we will see, there was a huge migration to centres of plentiful employment.
- Many Americans remembered the pre-war Depression, however, and, despite the prosperity, tended to live carefully and save where they could.
- While consumption rose it was not necessarily conspicuous or wasteful – at least not until, by the late 1940s, it became apparent that the prosperity was going to last.
- Then the consumer boom gathered apace.
- One should note, too, that not all areas of the USA were equally prosperous.
- These were mainly in the poorer areas of cities and the South.
- In 1947, 33 per cent of US homes lacked running water and 40 per cent flush toilets.
- Many families lived in rented accommodation and could hardly have imagined owning their own property.
- It was a measure of economic success that by 1960 so many were able to take these things for granted and home ownership had risen from 55 per cent in 1950 to 62 per cent ten years later.
4
Q
Growing Mobility
A
- The spectacular growth of the car industry led to much greater mobility and the development of suburbs.
- This meant that many Americans no longer needed to live in crowded towns and cities.
- The home became very important in terms of privacy and offering a comfortable lifestyle.
- Even more significantly, it came to symbolise the prosperity of ordinary people because they were owner-occupiers.
- One day, when the mortgage was paid off, it would be theirs.
- They were not spending their wages on rent but investing it in bricks and mortar.
- It was the lynchpin of the development of the 1950s middle-class family.
5
Q
Growth of the Car Industry
A
- Sales of new cars rose from 69,500 in 1945 to 6.7 million by 1950.
- The vast majority were US-made; in 1950 there were only 16,000 foreign cars on US roads.
- Clearly this led to a great expansion in the car industry, dominated by the ‘Big Three’ – Ford, General Motors and Chrysler.
- Cars seemed to symbolise the confidence of the age – they were sleek, ‘gas-guzzling’, big and colourful. In 1958, Ford produced a 5.79-metre-long Lincoln model. Choice was paramount, too.
- In 1961, there were 350 different models on sale. They were not cheap – a new Chrysler cost $1,300 or about 40 per cent of the average family income – but most were bought on credit.
- The number of two-car families doubled between 1951 and 1958.
- There were more cars in Los Angeles than in the whole of Asia and General Motors was wealthier than Belgium in terms of GDP.
6
Q
New Car Related Industries
A
- The growth of car ownership also helped develop the facilities associated with them such as roadside hotels, motels, gas stations and garages.
- The first Holiday Inn opened in 1952 between Memphis and Nashville in Tennessee.
- Des Moines, Idaho, saw the first McDonald’s in April 1955; by 1960, 228 McDonald’s restaurants enjoyed annual sales of $37 million.
7
Q
Interstate Highways
A
- Road building itself was given a major boost by the 1956 Interstate Highway Act, which boosted federal subsidies for road building and developed the infrastructure of US highways.
- It created a 41,000-mile system, mainly of dual carriageway, designed to eliminate unsafe roads, bottlenecks and other factors that impeded free traffic movement.
- Interestingly, the bill was intended to create ‘a national system of interstate and defence highways’ to facilitate speedy evacuation in the event of nuclear attack.
- However, road building developments also signified the demise of public transport in the USA.
- Passenger services on railroads lost an average $700 million per year by the mid-1950s (although this was partly due to the growth of long-distance air travel).
8
Q
Growth of the Suburbs (Suburbia)
A
- House construction away from urban centres had begun during the war years but expanded rapidly in the years thereafter.
- In 1944, 114,000 new family homes were built, rising to 1.7 million in 1950.
- In the decade following 1945, 15 million houses were built mainly for private purchase.
- The percentage of Americans owning their own homes rose from 50 per cent in 1945 to 60% by 1960.
- Many acquired mortgages through the government-sponsored Federal Housing Administration or Veterans’ Administration.
- These offered mortgages of up to 90 per cent of the cost price and interest rates as low as 4%.
- The percentage of people living in suburbs grew from 17% in 1920 to 33% by 1960.
- Critics complained that these suburbs all looked the same and lacked variety.
- Cinema and restaurant managers in urban centres complained of a lack of business as people stayed home.
- Too often conditions deteriorated in residential inner-city areas as they were left to the poor, often members of ethnic minorities, and they lost funding due to the ‘flight of the middle classes’ who would have paid taxes to live there.
- The suburbs, meanwhile, saw the development of new facilities such as the shopping mall.
- In 1946 there were eight, and over 4,000 by the late 1950s. Here everything could be purchased in one centre arrived at by car.
- These developments spelled disaster for many small shopkeepers.
- The development of the suburbs as a result of increased prosperity and car ownership effectively changed the lives of millions of ordinary Americans forever.
9
Q
Levitt Houses
A
- Levitt houses were among the most famous of suburban dwellings.
- William Levitt (1907–94) has variously been called the ‘king’ or the ‘inventor of suburbia’.
- While this is going too far, he nevertheless was instrumental in the development of cheap, affordable housing. Levitt was born into a family building firm that operated in the New York area.
- During the war he served in the ‘seabees’ or engineers and, after leaving the forces, simply applied the techniques of building military installations to commercial construction.
- His houses came in 27 separate parts to be constructed on site.
- The parts themselves were manufactured in factories using the techniques of mass production.
- Before the war the average builder had constructed five houses per year.
- In 1947, Levitt built 2,000 on a site in Long Island where the post-war housing shortage had been so intense that some people were living in coal sheds.
- By 1951, this original Levittown had grown to 17,000 homes in 24.283 square kilometres, housing 82,000 people.
10
Q
The Post-War Consumer Society
A
- The growth of suburbs and increasing confidence that the prosperity was here to stay led to a huge consumer boom.
- Wages generally rose; by 1953, the average family’s annual income had reached $4,011.
- This meant many people had money to spend – in fact their disposable income rose on average by 17%.
- There was a rapid expansion in consumer items fuelled by incessant advertising – itself a multibillion dollar industry rising from $6 billion in 1950 to over $13 billion by 1963.
- By 1960, there were over 50 million televisions in the USA.
11
Q
The Post-War Baby Boom
A
- Due to the boom in population, baby clothes and nappies were in particular demand.
- By 1957, nappies alone became a $50 million per year industry.
- In 1980, historian Landon Jones wrote, ‘the cry of the baby was heard across the land’ as their numbers grew.
- Four million babies were born each year between 1954 and 1964.
- In 1964 40% of the population had been born before 1946.
- This was possibly the golden age of the American nuclear family.
- The divorce rate fell from 17.9 per 1,000 marriages in 1946 to 9.6 by 1953.
- The average age of marriage for females fell from 21.5 years in 1940 to 20.1 by 1956 and within seven months of marriage most women were pregnant.
12
Q
Post-War Leisure Time
A
- The amount of leisure time rose, too.
- One commentator reported that by 1956 many Americans were spending more time watching television than actually working for pay.
- They were filling their homes with labour-saving devices.
- By 1951, 90% of American families had fridges and 75% possessed washing machines and telephones – often paid for with credit.
- The amount of debt increased from $5.7 billion in 1945 to $56.1 billion by 1960.
- The first Diners’ Club cards were introduced in 1950 and American Express dates from 1958.
- Among the new products were frozen and convenience food and TV dinners, long-playing records, electric clothes dryers and Polaroid cameras.
- The introduction of plastics and artificial fibres meant it was easier to keep items clean.
13
Q
Post-War Consumption
A
- With 6% of the world’s population in the early 1950s, the USA consumed a staggering 33% of all the goods in the world and controlled 66% of the world’s productive capacity.
- On a more basic level, just the consumption of hot dogs increased from 750 million in 1950 to 2 billion by 1960.
- A famous photograph showed a typical family with the two and a half tons of food they consumed yearly, including 300lb beef, 31 chickens and 8.5 gallons of ice cream.
- Their weekly budget for this amount was $25.
