THEME 4 Flashcards
BOOM
- Mass production - breaking manufacturing down into small series of steps which allocated more employment for example, Henry Ford’s car factory mass produced goods were sold quick and at a cheaper price. Hence this attracted manufacturers to buy and sell goods esp car parts and radios. There was a new method employed that was given a scientific basis as each step was broken down and a worker was assigned to that case.
- System good in factories were wages were stable + good working conditions.
- Fed policies - they hated any gift intervention however they still kept the wartime subsidies for farmers and kept prices low in order to help - hire purchase scheme available.
- Industries further changed as they used mechanisation - technological boom - older industries as textile became out dated.
POST WAR DEPRESSION
-During war - farmers told to produce more wheat and given subsidies to do so - some took out loans to buy farmland and machines – mechanisation=smaller number of workers=unemployment. They made a lot of profit however after the war the production of wheat was too much and nobody bought it so prices reduced severely. Farmers growing cotton also had trouble due to boll wheevil.
INDUSTRY - strikes in 1919 and 1920 - local and nation-wide for the conditions that workers had thus they faced unemployment. older industries in the north and the east were in decline and the coal industry lost out to other fuels likee water power.
1900 - coal power produced 90% of energy supplies however by 1930 the figure fell to 30%.
- laissez faire theory - isolationist = tariffs on foreign good however other countries did too hence exports failed.
STOCK MARKET
1920 - prices of shares increased massively in the new industries - people bought shares for a long time and the dividends paid out. Media highlighted that as share prices rose it was easy to make money and sell them late hence everyone began buying - resulting in a bull market however there was its own boom cycle too as people bought and sold shares. They also began buying on the margin - borrowing money from banks.
BUST
1929 - boom cycle went bust as people who could afford to buy goods had already bought them hence demand fell. companies did not cut production hence product built up in the warehouses. Unemployment soared and wages were cut, federal reserve board tried to control the depression by tightening the money supply but this made a lot of things worse. Stock prices began to fall as investors kept selling their shares - a bear market replaced the bull as people invested heavy on credit and feared losing money/ stock exchange also closed.
THE Great Depression
-Wall st crashed deepened the crisis and banks went bankrupt - people lost homes and mortgages.
ECONOMIC INFLUENCES : THE SECOND WORLD WAR AND POST WAR AFFLUENCE 1941 TO 1969
Boosted the economy - there was a huge demand for consumer goods that had previously been missing coz of the war which made the transition easy between war life and normal life. Production increased $213 billion in 1945 to $280 bil in 1950.
- Businesses boomed - employed more workers and increased their wages.
- Govt came down hard on strikes, when coal miners went on strike Truman took personal control - took over rail workers too they marooned 90k passys and 20k goods thus threatened to draft them into army .backed down
BABY BOOM
-increased goods for children.
1947 nappy sales = $32 million and in 1957 = $50 million
Toy manufacturers made $1.6 million by 1959 too. 1940 = 2,559,000 births but by 50 this increased to 3.632 million births. more toddlers = more schools= more consumers.
FARMERS
did well, had subsidies from the government - demand for farm produce at home and abroad also grew steadily.
GOVT SPENDING
Trumans fair deal policies - govt provided support for all those leaving the military after the war tis included a payment, payment for end unto 12 months, medical bills and loans to buy houses and loans. 12 million did the GI bill.
Govt also increased the amount of social payments and 1949 slum housing clearance replaced slums and 810,000 low income houses built.
THE SUBURBS AND HOW THEY SIGNIFIED CHANGE
-they were a visible sign of economic growth in the USA, factories colleges and universities moved outside the city where there was more land. The govt funded the building of roads and buildings and the 1956 interstate act emphasised this. This allowed 41,000 miles and they were willing to invest in the suburbs too. The levett company specialised in mass produced houses that were quick and cheap to build which led to levittowns in the north east. 17,000 homes in long island for 82,000 residents which were under $7000
continuing economic changes and shifts
There was a shift in where the consumer goods came from as there was an increase in the consumer demands, the USA was losing its position as the country of technological advances - they had created radios but did not do enough to advance them.
However, there was a shift from the north and east part of the country to the south where there was more of an availability for land this was because of wartime investment and production especially in military and air craft. - development of air con attracted people there - better jobs and better weather led to them emptying out the inner cities.
in the 1950’s, they govt moved away from the new deal thinking which was to increase govt spending even if it increased the budget deficit. However, in the new economic strategy they wanted to keep interest rates low therefore increase money supply which they thought would keep a hold in inflation however in 1952 there was 4162 in circulation not counting any savings however in 1962 there was $215.8 billion.
1960’s and the economics
The usa lost its place as the main exporter as the vietnam war was draining govt finances and it was also caused by the social welfare payments. They were increasing money supply however inflation was still rising as it helped them meet the social and welfare payments. However the amount of gold that the govt had kept failing so the balance between gold reserves and money reserves was out of balance, increased inflation.
1960’s and the economics
The usa lost its place as the main exporter as the vietnam war was draining govt finances and it was also caused by the social welfare payments. They were increasing money supply however inflation was still rising as it helped them meet the social and welfare payments. However the amount of gold that the govt had kept failing so the balance between gold reserves and money reserves was out of balance, increased inflation.
GOVT ACTION
Could not cope with the economic crisis of the 70’s as 3 crisis’ happened propelled by the rising fuel prices and rising food prices. Govt spending was quite high due to social security payments and pensions in the consumer index fund 1972 and 1974.
The vietnam war upon ending had saved money however it was used up when giving soldiers health benefits and education.
It was too scared of the public’s reaction as they striked at inflations and unemployment rises. Although the social domestic payments helped the people it was supposed to, it put the govt into deeper debt. However the crisis also affected a vast majority of people, some people were living in their credit, going deeper in debt themselves., homes repossesed and they became homeless. Govt welfare.
ENERGY PROBLEMS
Two fuel crisis’s in the 1970’s - fuel shortages, long lines speed limit of 55mph in the first crisis and food rationing.
- In 1974 the arab israeli war the organisation of petroleum exporting countries supported palestine, whereas usa didn’t. OPEC put prices up by 70% and embargoed the oil being exported to USA and every other country supporting israel. Jan 1974, oil prices higher by 4x
- 1979 there was another fuel crisis, no fuel rationing and only lasted 3 months.
- Impact: it affected those who drove, people as young as 15 could drive, it also created high levels of discontentment in the govt, people felt that the govt could not handle the crisis and it also made things worse. Consumer confidence affected and also govt confidence too.
