1920s Business BOOM! America is awesome! 14.2

1920s Economy Economy is booming.Economy is booming. Consumer economyConsumer economy –Depends on large amount of spending by consumers. Buying on creditBuying on credit –Installment plan Electric powerElectric power AdvertisingAdvertising Rise in productivityRise in productivity –GNP = Gross National Product

Henry Ford Made the automobile accessible to millions of AmericansMade the automobile accessible to millions of Americans –Used assembly line method to build cars –Economies of scale The more cars he made, the few it cost to make each one. –Vertical consolidation Owned every step of the supply chain

Ford’s Impact Auto industry became nation’s largest.Auto industry became nation’s largest. Growth of other industriesGrowth of other industries –Steel, rubber, glass, leather, gasoline –Garages, dealerships, motels, gas stations, restaurants FordismFordism –Paying employees more (They buy stuff, too.) –Americanization for immigrant workers

Other Growth Media industry growingMedia industry growing –Movies, radio, newspapers, magazines Air travel industriesAir travel industries –More common as decade progresses (advances in tech) –Spurred by Earhart & Lindbergh Monopolies declined, despite little regulationMonopolies declined, despite little regulation –Healthy competition encouraged economic growth

Missing out Some Americans struggled to survive in the 1920s.Some Americans struggled to survive in the 1920s. –Unskilled laborers remained poor. –Railroad industry workers Farmers also struggled - deeper into debt.Farmers also struggled - deeper into debt. –Recovering European farm industry –Wartime demand shrunk –Farm prices dropped dramatically –Could not pay back debts from farm equipment

Moral of the Story America is booming! The sky is the limit!America is booming! The sky is the limit! –“What about those last people: farmers, etc?” –“Well, you have to break a few eggs to make an omelet.” If we just stay out of the way of the American economy, nothing could possibly go wrong.If we just stay out of the way of the American economy, nothing could possibly go wrong. –Right?