Presidential politics of the 1920s…
Warren G. Harding
Calvin Coolidge
Herbert Hoover
Republican Ascendancy
• Republican victories in
1920s.
– Progressive regulatory reform
gave way to pro-business
sentiment.
• “The business of America is
business.”
• President Calvin Coolidge
– Government placed in the hands
of business.
REPUBLICAN ECONOMY SUPPORTED LAISSEZ FAIRE AND BIG BUSINESS……….
+
Lower Taxes
+
Less Federal
Higher
Spending
Tariffs
=
Strong
National
Fordney-McCumber Tariff---1923
Hawley-Smoot Tariff ---1930
raised the tariff to an unbelievable 60%!!!
$
Economy
Warren G. Harding
– Return to Normalcy after
World War I
• Isolationism—avoided
foreign alliances but…
• Called for Disarmament
of European nations
• War Debts—Europe
debts were scaled back
to allow their economies
to recover
The Harding Presidencythe Worst?
• Warren G. Harding’s modest
successes include the KelloggBriand Pact which renounced
war as a means of national
policy (signed by fifteen nations,
but difficult to enforce)
• the Dawes Plan which solved
the problem of post-war debt by
providing loans to Germany to
pay France/Britain who then
paid the U.S.
Harding 1920-1924
Business and Politics of the 1920s
• Four main sources of
the 1920s economic
boom
• Taylorism
• Increase in worker
productivity
• Automobiles!
• Psychology of
consumption
Relations between Government and Big
Business.
• High Tariff Policies
• Reduction of personal
and corporate taxes.
• Less business regulation
by the FTC.
• Government price
fixing.
• Closed/open shop
policy.
1920s: Tough Times for Unions
• The 1920s hurt the labor
movement. Union
membership dropped
from 5 million to 3.5
million. Why? African
Americans were excluded
from membership and
immigrants were willing
to work in poor
conditions.
Ford Foundry workers in 1926; only
1% of black workers were
in Unions at the time.
An Economy in Transition
• Prosperous decade:
– Unemployment under 5%
– Paychecks increased,
prices dropped.
• Economic transition from
capital goods to
consumer goods
• Consumption the key to
prosperity.
Consumerism and Advertising
• Shift from stressing the product to
stressing consumer desires
– health, popularity, social status
– a reliance on emotion
• Influence from World War I
propaganda
– passion and emotion
• Create fears and desires by centering
message:
– on the body
– on control of the audience
– advice from “specialists”
Psychology of consumption
•
•
•
•
Radio (KDKA)
Motion Pictures
New Appliances
Advertising
The Impact of the Auto
The Ford Model T was the first car
in America. It came only in black
and sold for $290. Over 15 million
were sold by 1927.
• The auto was the
backbone of the
American economy from
1920 through the 1970s.
It also profoundly
altered
the American landscape
and society.
• Available due to Cost
and Credit (installment
plan)
How Auto Changed America
•
•
•
•
•
•
•
Paved roads, traffic lights, motels, billboards
Home design (garages, driveways)
Gas stations, repair shops, shopping centers
Freedom for rural families
Independence for women and young people
Cities like Detroit, Flint, Akron grew
By 1920 80% of world’s vehicles in U.S.
Herbert Hoover
• Followed Harding and
Coolidge as business policy
• Efficiency movement
– Experts find inefficiency
and fix it
– Increase volunteerism
• Stock Market Crashes
• Action for Farmers
– Pushed for farm subsidies
• Started to regulate
financial
institutions
Herbert Hoover…Importance
• The "trickle down" economic theory of President
Herbert Hoover was based on the idea that
– 1. balanced budgets are essential to economic success.
– 2. the Federal Government needs to assume more
responsibility for solving economic problems.
– 3. economic growth depends on making increased
amounts of money available to business.
– 4. economic stability is the responsibility of Federal
monetary agencies.