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World War 1
The United States' involvement in World War 1 created a spark of domestic nationalization, and international globalization. The economy skyrocketed during World War 1 before the United States joined, since it was the first "modern mechanized war." Exports grew from 2.4 billion in 1913 to 6.2 billion in 1917, as United States exports greatly helped both sides during its period of neutrality. The market expanded, as the war brought prosperity and established US economic superiority. -
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The "Roaring 20's" Economy
Following WW1, the 1920's economy was booming, but was filled with small economic hiccups until the major collapse of Black Tuesday in 1929. The Federal Reserve "used expansionary monetary policy to counteract mild recessions" (Keller, 878). The modernization of war in WW1 began to translate to domestic living, where more people became economically prosperous and started living in cities. Mass production expanded, but overspending proved to create economic instability for the future. -
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The Great Depression
After the stock market plummeted in 1929, the nation entered the 'Great Depression.' Overproduction and overconsumption occurred. President Herbert Hoover's ideals of less federal intervention in the economy haltered the relief efforts. Its "policy of self-sufficiency" and overspending created instability world wide (Gay 540). Domestic investment dramatically decreased, where it went from 16.2 billion in 1929 to 300 million in 1933 (Levy 357). -
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New Deal Capitalism
Franklin Delano Roosevelt's "New Deal" initiative brought the American economy out of the Great Depression, with its liberal ideals and policy. After the complete collapse of the banking system, the New Deal policy resulted in the FDIC, which "forever liberated banks and depositors from the fearful psychology of bank "runs"" (Kennedy 255). The New Deal had also made citizens less concerned over mortgages and housing payments, with the creation of F.H.A. insurance (Kennedy 258) -
The Marshall Plan
The Marshall Plan "marked a turn in American foreign policy" with a switch to multilateralism (Weissman 112). By helping aid other countries financially and making economic expansion in Western Europe the goal, the Marshall Plan helped Europe immensely. Not only did the Marshall Plan begin the fight for world peace, but it aided Europe in economic reconstruction, which in turn helped America's economy. The Marshall Plan marked a turning point, and created the seeds for globalization. -
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Consumerism and Recovery in the 1950's
The 1950's economy prioritized the WW2 recovery, but it also created over-consumerism which can be seen in today's economy. This era created suburbia, which in turn created overconsumerism, since individuals felt like they needed new things to fill their houses. The concept of credit also was created during this era. However, the boom of suburbia during WW2 resulted in a further divide amongst white and black Americans, as only whites benefitted from it. This created the seeds for civil rights. -
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LBJ's Great Society
President Lyndon B. Johnson's 'Great Society' aimed to tackle the War on Poverty. Racial minorities and urban communities were struggling with severe poverty issues, and Johnson sought to use social welfare efforts to solve these issues (Levitan and Taggart, 603). Although the war on poverty outlined these problems and sought to change them, little was done, and the war on poverty and divide with suburbia only further targeted urban communities. -
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Reagan Administration Economics
The Reagan administration's economic policies sparked a shift in conservative ideology. Reagan's economic monetary policy "called for a gradual reduction in money growth to reduce and eventually eliminate inflation" (Meltzer 531). Although it did reduce inflation, it did "leave a residue of problems" for a handful of institutions (Meltzer 531). Reagan also is responsible for the "trickle-down" theory, in which reductions for corporations and the wealthy would then help everyone. -
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The "Roaring Nineties"
The 1990's were a period of massive economic expansion, almost mirroring the 1920's. The tight labor market created an acceleration of productivity growth, which, by the end of the decade, transformed the speed of the economy. Demand was higher than ever, which resulted in increased and faster production. Wage growth and employment rose, which resulted to a growth in income, another factor of the rise in consumption (Weller, Learning Lessons from the 1990s). -
The Crash of 2007-2008
The crash of '08 was a result of the "risky lending in the housing market" that created "a bubble in housing prices and leaving banks in a precarious position when the bubble burst" (Bookings Institutions Press, 67). Americans were no longer able to afford their homes, and many lost their homes because of banks and the stock market crashing.