1. The Boom Economy of the 1920s
An Exploration

2. Big Business
Harding, Coolidge and Hoover all believed in laissez faire policies
Many progressive reforms overturned
Mergers on the rise
Period of great expansion

3. Union membership

4. Union membership on decline throughout 1920s
Unions
Union membership on decline throughout 1920s
Effects of Red Scare
Government and courts sided with business
Economic prosperity eases demand for unions

5. The Automobile 1920s begins the “Automobile Age”
Production goes up, prices go down
Car ownership expands
Stimulates economy

6. Automobile Age The car helped the economy in several ways
Demand for inputs
Wages for labor
Highway and road construction

7. Henry Ford Business pioneer “Fordism” Mass production Mass consumption
“Any color as long as it’s black!”
Mass consumption
Higher wages
Americanization

8. Other Sectors Also Strong
Construction
Electrical Goods
Modern conveniences
Appliances
Durable Goods
Entertainment

10. Critical Thinking
What is the significance of the expansion of radio?

15. American Cities Grow 1920 Census: Over 50% of Americans live in cities
Detroit and Los Angeles arrive

16. But Farmers Have Problems
Prices that had risen as a result of WWI begin to fall
Many farmers had borrowed to buy land that is now worth much less
Attempts at farm subsidies were rejected by Coolidge

17. Were 1920s Prosperous for All?
Income inequality grew
1920: Top 1% earn 12%
1929: Top 1% earn 19%
But standard of living rose for all
Electricity
Sanitation
Health care

18. Stock Market A decade of impressive growth Bull market
By some measures, value more than triples
Buying on margin
Put 40-50% down, borrow the rest
Boom not based on fundamentals
Most believe it was “irrational exuberance”
Similar to “Tech Bubble” in 2000

19. What Goes Up…