1. BOOM INDUSTRIES and CORRUPTION
The 1920s

2. Post-war depression to BOOM
GDP rose 40%
Productivity rose 72%
Per Capita income rose by a third
Per capita income or average income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year. It is calculated by dividing the area's total income by its total population

3. Expansion was spurred on by…
Post war profits
Mechanization
Mass production
Efficiency
Scientific management
electricity
The automobile drove the economy
Provided 1/14 jobs
Stimulated other industries
Steel
Rubber
Glass
petrolium

4. Not only the automobile
Aviation
Chemicals
Radio
Motion Picture

5. Corporate Consolidation
Small firms bought out
Oligopolies (control over an industry)
Examples: Ford, GM, and Chrysler
Open Shops break unions
Yellow dog contracts bind employees
Welfare Capitalism
Alternative to union membership
Firms provide med insurance
pensions
Vacation time
What does this do to the relationship between worker and corporation?

6. Real Wages = Purchasing Power
Wages weren’t rising, prices were falling
With rising productivity, this is a threat to overall economic health.
WHY?
Gap between the rich and poor
By % of Americans were living under the poverty line
Relief came in the form of credit
But the unintended consequence were “sick Industries”
Sick industry = excess capacity, shrinking demand, low returns, mgt and labor conflicts

7. Federal Government advances Business
At the expense of other objectives
Budget and Accounting Act
Budget Bureau
General Accounting Office
Shapes the 1920s economy
Tarrif of 1922
Raise import rates
Promote open shops
Exploit foreign markets
Hands off business approach
Reduce taxes on the richest Americans

8. The men behind the prosperity of the 20s

9. The courts support big business
Struck down progressive legislation
Invalidated restraints on child labor
Approved restrictions on labor unions

11. 1924 Election

12. Coolidge Cuts Coolidge believed in limited government Cut WWI bonuses
McNary-Haugen Bill (& Farmers)
Cut Republican efforts too!