Topic 4 - Changing Quality of Life (BOOM TO BUST) Flashcards
1
Q
economy in 1917
A
- US enters FWW during which US economy gains a great boost
- profound boost selling armament to allies
- sinking of the Lusitania - problems between US and Germany
- smaller direct involvement meant profit
- when war ended some economic difficulties - jobs ended and no European trade market - red scare - workers rights - Wilson
2
Q
economy 1918 to 1929
A
- Republicans resort to isolationist policies
- followed by great boom of 20s
- enjoying life despite prohibition
- white middle class thriving
- minorities perhaps still finding their feet
3
Q
economy in 1929
A
- WALL STREET CRASH :(
- led to global depression
- bubble burst - USA forced to take stock
- Hoover tried to fix things and failed
4
Q
economy in the 30s
A
- 1933 FDR now pres and his New Deal greatly helped economic recovery
- alphabet agencies
- confidence back up
- Second New Deal included the Wagner- Steagall National Housing Act to clear sums and build almost 1 mil houses for low income people - clear Hoovervilles
5
Q
economy in the 40s
A
- 1941 Pearl Harbour - US in SWW which became second most important reason they recovered from GD
- Bretton Woods agreement signed which made the US dollar the currency to be backed by the gold reserve
- most pure and trusted currency in the world prior to the pound
- back up rise of US - prove how far they have come
- important in international scene
- sleeping giant to world superpower
- not just economic but political powerhouse
- new deal good by SWW changed things
6
Q
what did Truman pass in late 40s to aid the economy
A
- 1946 - Employment Act created a council of economic advisers to assist the president
- need to balance out economy as some people like minorities lagged behind
- 1949 Truman’s Housing Act as part of his fair deal policies
7
Q
discuss the economic cycle
A
- unrealistic confidence (bandwagon)
- realisation this is unsustainable and everyone is in trouble
- uncertainty - where are we
- panic
- realignment of expectations based on fact
- confidence based on fact and hope
8
Q
discuss how the stock market works
A
- new company people invest - price high
- smart people realise the company is bad and sell when price is high for profit
- people copy
- shares cheap people buy
9
Q
how did the stock market crash in 1929
A
- companies put themselves on stock market
- investors buy
- this happened on mass scale in 20s
- but because people were spending - had money, loans and credit - and value of companies always going up people who didn’t really understand the stock market where drawn in
- people that make their fortune buy and sell at the right time
- 1929 - too many unsustainable investments at once so it crashed
- many people couldn’t get out at the right time and had bought their stocks on credit
- bought on the margin
10
Q
what was the economic impact of the FWW
A
- FWW increased demands of US production capacity not just in supplying allies but also home consumption after April 1917
- farming and industry boomed
- many farms/factories introduced mechanisation to meet rising demands
- after the war this meant fewer jobs tho and thus rising unemployment
- farmers also over producing after war which lowered prices and profits
- post war economic depression
- newly elected Repub gov believed in laissez faire saying depression would right itself and it did
- isolationist tariffs e.g. meant reduced exports but did encourage American buying
11
Q
what was problematic about the 1920s
A
- it was built on loans and credit
- made people want to immigrate to USA
12
Q
what is Taylorism
A
- mass- production
- reducing manufacturing into a series of steps and making one worker responsible for each step in the process
- specialising in one role
13
Q
what is Fordism
A
- mechanisation by moving assembly line
14
Q
what was the impact of combining Fordism and Taylorism
A
- created the perfect efficient process to maximise car output and thus profit
- more profit meant that prices could be lowered to increase sales and leave people with the necessary money for fuel and maintenance
- everyone was happy
15
Q
give 5 manufacturing factors that led to the boom time of the 1920s
A
- mass-production (Fordism and Taylorism)
- new management techniques
- federal policies
- hire purchase
- changing industry
16
Q
how did new management techniques contribute to the boom period of the 1920s
A
- ideas from Fredrick Taylor about scientific management
- encouraged the payment of good wages and maintaining good working conditions in the hope contented workers would produce more goods
17
Q
how did federal policies lead to the boom time of the 1920s
A
- although the Republican government preferred to avoid interreference in business, it did keep some of the wartime subsidies in place
- cut taxes for businesses to encourage consumers to buy American
- Republicans championed American businesses
18
Q
discuss how Hire Purchase and Loans (HP) lead to the boom time of the 1920s
A
- before war borrowing money was seen as a last resort but in 1920s people were encouraged to buy now pay later
- by 1929 the average consumer was borrowing around 10% of the annual income
- good only in moderation with regulation
19
Q
discuss how changing industry led to the boom time of the 1920s
A
- new industries were more efficient and used higher levels of mechanisation
- there was also a shift away from the staple industries (textiles, ship-building, coal and steel) towards consumer good production
20
Q
what is the Bull market
A
- when everyone wants to buy and throw their money at a market charging head first into the stock market
- spending savings and buying stocks
21
Q
what is the Bear market
A
- people scared of bears like they were scared to invest
- what is was after 1929 crash
22
Q
discuss what buying on the margin led to
A
- 1920 price of shared in new modernises industries rose rapidly
- where before share trading had been the domain of banks and rich people now everyone wanted to cash in on the money to be made in buying and selling shares
- shares went into boom cycle/bull market
- media played a part in raising awareness of the money that could be made on stock market
- people believed it was a sure thing to reap profits from stock buying
- many got loans to do so - buy on margin
- gov did nothing to regulate it and what goes up must come down
23
Q
give some of the impacts of the Great Depression
A
- bankruptcy for many businesses
- banks failed
- extreme unemployment
- people lost homes when couldn’t pay mortgage
- people stopped buying which meant prices fell and more businesses failed
- republicans did little so out goes Hoover and FDR left to fix it all
- FDR ran out huge gov debt to fund his New Deal
- can’t pay workers
- private banks meant no other branches to help
- banks couldn’t give people their savings - panic and riots
24
Q
discuss some good stuff FDR and his New Deal did for the economy
A
- closed banks for a short period
- promised prosperity whatever it takes
- alphabet agencies
- banking acts to regulate
- pension schemes
- social and financial security
- Frances Perkins
25
Q
what was the impact of the SWW on the US economy in comparison to the FWW
A
- massively expanded it
- no post war depression this time
26
Q
why did the US economy continue to boom after the SWW
A
- industry was easily transformed from war production back to consumer goods
- increased wages encouraged spending - increased demand - people worked during the war but had nothing to spend money on
- post war baby boom increased demand and over LT as they turned into teens
- farmers boomed - demand for home produce increased as population grew as did overseas demand
- Truman took hard line against Unions and Strikes
- Truman’s fair deal increased gov spending but advanced welfare, education, housing which all increased employment
27
Q
what was Consumerism
A
- positively patriotic (anti-communist) - the American way
28
Q
what did Truman take a stance against after the SWW which contributed to the boom
A
- took a hard line against Unions and strikes
- in coal and rail industries e.g. strikes led the government to nationalise the industry
- tried to stop another red scare which was ironic as one happened anyway
29
Q
what factors can you consider for the question:
“was the SWW the main reason for post-war affluence in the 1950s”
A
- presidency
- confidence in the pres and american ideals
- post war baby boom and its relationship to the war
- new suburbs
- USA great industrial capacity
- great confidence generated by America’s superpower status following victory in the SWW
30
Q
discuss aviation after the SWW
A
- SWW had significantly advanced aviation tech so in post war period new civilian airlines greatly advanced business opportunities and employment
- prove how far America had come and how things had improved economically/industrially
- FWW when aviation first began
- tourism
- trade
31
Q
Bretton Woods Agreement 1944
A
- another impact of SWW was the on the international market the Dollar became the primary currency to be backed by a gold reserve
- USA’s gold depository had moved to Fort Knox in 1937 and became the stuff of legend thereafter
- safe and securest currency in the world
- all other currencies weighted against it
- precious commodity
- never lose value
32
Q
discuss the introduction of the Levittown
A
- brought assembly line construction concepts to housing and created the American suburb
- new lifestyle for people who could afford it
- wouldn’t sell to AA
- change the economic spectrum for a lot of people
- sign of success for America - cars - idyllic lifestyle
- teens grow up there and spend money
- JFK brings housing act in early 60s but in 50s impossible to live in suburbs unless white
33
Q
what is the problem with constant buoyancy in the economy
A
inflation
- high inflation is when prices rises faster than wages - this is when governments are keen to intervene in the market economy
- artificial inflation is when businesses know people like their products so start to creep up the prices - taking advantage makes people start buying overseas
34
Q
what are the traditional methods to tackle inflation
A
- raise taxes so people spend less
- increase government spending
- increase supply of money which also helps with welfare expense
- tricky because you don’t want people to stop spending money otherwise businesses fail and raising taxes can lose you an election
35
Q
who was tasked with tackling inflation
A
the Federal Reserve Board
36
Q
discuss the economy in the 60s as inflation rose
A
- with welfare high and cold war costing billions the constant increase in supply of money led to a downturn in the economy
- the dollar was no longer satisfactorily balanced on the Gold Standard
- meant USA entering a period of Stagflation - businesses stagnate but inflation carries on rising
- gov spending more than they can maintain - GS and war was huge strain
37
Q
overall view of 50s
A
- good
- couple of hiccups with second red scare and Korea
- perhaps too much confidence
38
Q
in depth view of the 50s how did it go from boom to stagflation
A
- 50s arguably America’s greatest decade at least in terms of optimism, wealth, and the USA’s sense of power on the international stage
- the boom had to end tho
- tho more people spending more on consumer goods many of goods not from America
- while USA basked in 50s glory its previous enemies Japan and Germany were expanding their economies to become rival economic powerhouses
- new communist enemies USSR and China also attempting to outproduce the USA
- growing dependence on gov - war - poverty - overseas competition
- Japanese cars more economical
- European appliances cheaper
39
Q
discuss the economic crisis of the 70s
A
- federal gov struggled to cope with it
- although end of V war saved money, welfare spending at an all time high
- confidence in executive at an all time low
- fuel shortages of 1973 and 79
- by 1974 fuel was 4x price it had been and never returned to earlier levels
- people stopped buying American gas guzzling cars and bought economical ones from overseas
- people stop spending to be careful - suburbia meant they needed to afford oil to commute to work
- businesses struggle and people get laid off
40
Q
what are three points of discussion for 70s
A
- Cronkite
- media
- portrayal of President’s
41
Q
discuss ford and the economy
A
- V war brought to humiliating end
- domestically he presided over worst economy in the four decades since GD
- growing inflation and recession
- controversially pardoned Nixon
- yo-yo taxes
- didn’t help economy
- oil crisis
42
Q
discuss carter and the economy
A
- in attempt to restore confidence he addressed nation in fireside chat style thing to discuss energy crisis
- said facing biggest confidence crisis
- failed at ending stagflation and fixing economy
- methods to resort to austerity - spending cuts and tax increases to balance the budget which made him unpopular
- homelessness and unemployment levels reminded people of GD
- instead of solving oil crisis he told people to wear a jumper
- Iranian hostage scandal
