The economy during the 1920’s was at its high point with new inventions, people could afford everything because of installment plans, and almost everyone was invested in the stock market. In the 1920’s many new things were coming out. Radios allowed people to listen to music or sports games, assembly lines helped to make new products faster and cheaper, Airplanes were being flown from country to country, and Traffic Lights were being used to help control traffic. Even simple things like cheeseburgers or toasters were invented at this time and it was all helping the economy boom.
This was also when installment plans came out. Installment plans are credit systems where payment for merchandise/items is made in installments over a pre-approved period of time. Because of this, people could afford everything and pay it back at a later time. Installment plans were especially helpful in purchasing things like the Ford Model T Car. The stock market also played a huge role during this time. People were buying stocks and were almost certainly guaranteed to make more money. Almost everyone at this time was invested in the stock market and some had their whole life savings put into it.
It was a get rich quick system that no one expected to fail. They probably should have been a bit more cautious. The economy during the great depression was completely opposite from the 1920s. The stock market had crashed, bank failures left people with no money, and the domino effect of purchasing goods made people lose even more jobs. One of the biggest reasons the economy was booming in the 1920s was because of the stock market, until it crashed. Two months after the original crash in October, stockholders had lost more than $40 billion dollars.
Even though the stock market began to regain some of its losses, by the end of 1930, it just was not enough and America truly had entered the Great Depression. The crash of the stock market left people scrambling for their money. Because of this, throughout the great depression over 9,000 banks failed. Bank deposits were uninsured and thus as banks failed people simply lost their savings. Surviving banks, unsure of the economic situation and concerned for their own survival, stopped being as willing to create new loans.
This caused lots of people to be without much money and they just couldn’t afford to spend money on things they didn’t need. Because of this individuals from all classes stopped purchasing items. This then led to a reduction in the number of items produced and then a reduction in jobs because companies couldn’t afford to keep their employees. As people lost their jobs, they were unable to keep up with paying for items they had bought through installment plans and they lost these things. The unemployment rate skyed up to 30% which meant even less spending for people.
The economy had hit rock bottom and the great depression left people without money, jobs, and in a lot of cases their house. In the ‘roaring twenties’ social life was changing rapidly with things like baseball games, movies, and new types of music. Baseball is what people call ‘america’s pastime’ because anyone could afford it and it was for any and all people. Baseball got really popular during this time and attendance was at its highest. Also during this time people were turning to movies as new forms of movies were being made. Movies weren’t short anymore and in most cases now had audio.
People were fascinated by this and movies became a very popular thing in the 1920s. Lastly, new forms of music were also coming out. The “jazz age” featured many new artists and a new form of music called ‘jazz’ that was very fun and later turned into ‘pop’. Because of new inventions like the radio people could listen to Jazz at all times and it became VERY popular. During the great depression though, people could no longer afford all these things so social life began to change. People could maybe afford to see a movie once a year.
Baseball attendance was at its lowest because people simply couldn’t afford it anymore. Most people still had a radio to listen to music but it wasn’t the same as going out to watch an artist. The great depression forced a lot of people to not have this type of entertainment anymore because of how poor everyone had become. In the 1920s, all the presidents were good and the economy was booming. Also during this time, new laws were coming out which all helped further the economy and help make United States a better country after world war one.
The Palmer raids, the Red Scare, a drive to get “reds out of the country” began on January 3, 700 people were arrested. Shortly after this the 18th Amendment went into effect, prohibiting the making, selling, possessing, and drinking of alcoholic beverages. This would then be repealed in 1933. By the 1920s, many Americans had grown tired of war and constant attempts at reform, including numerous attempts to pass moral legislation. Many people wanted a simpler way of life. Warren G. Harding’s policy was a “return to normalcy” which helped him win the 1921 election.
In 1924 after Hardings death, Calvin Coolidge would win the election by a landslide and helped the economy out further. Four years later in 1928 Herbert Hoover won the election promising to build upon the booming economy Coolidge had left. He would then remain the president until the great depression. During the great depression people wanted someone to blame and Hoover was the one people chose to because he was the President. Because of this president FDR won the next election easily as he promised a new start.
Immediately FDR got to work in restoring the economy with the 1st new deal. These series of economic programs he initiated between 1933 and 1936 had the goals of giving work to the unemployed, reform of business and financial practices. He would then get to work on a second new deal which included labor union support, the WPA relief program, the Social Security Act, and programs to aid farmers. Because of these things he was able to get people jobs, the unemployment rate was cut in half by 1936 and in 1942 was down to less than 3%.
FDR had restored faith in the economy and the country was back up and strong. The 1920s and the great depression were far different from each other in lots of ways. The economy had gone from the best it had ever been to the worst in just a few years and the economy was at its low point. For 10 years 30 percent of people in America were without jobs and many people didn’t even have a place to live. FDR helped establish the economy again and by 1946 the country was in top shape. Only a percent of people were without jobs and United States and the economy was restored.