False Prosperity and hidden problems of the 1920's
Consumerism
The 1920's is characterized by images of massive parties, fancy cars and beautiful mansions. The reason that all of these objects are so vital to understanding the 1920's is because they represent the surge of consumerism that swept the nation during the decade. In the 1920's American citizens were buying an unimaginable amount of goods and products. This provided a temporary boost to the economy. The reason that consumer's went so rampant during this period was due in large part to two factors. The first factor was the modern advertising of the time. Commercials beamed through the radio waves convincing people to buy products that they not only did not need but also couldn't afford. Advertisements of this magnitude were never before seen, therefore the American people were initially vulnerable to them. The second factor that allowed for consumerism to expand so rapidly were the "installment plans" of the time. These plans allowed people to essentially buy things now and pay later. They are comparable to the credit cards of today. As a result people were able to buy many things that they could not afford and many Americans ended up in a large amount of debt. As a result of these factors it appeared as though everyone was doing fine and had a lot of expensive possessions when in reality many people were poor. This is a major part of the false prosperity the was occurring in the 1920's. One of the reasons why none of this was stopped was because of the reduced role of the government in the economy. Had the government intervened, as it did many times during the progressive era, there is a chance that the people could've been protected from being duped into debt and the economy may not have crashed as it did.
The 1920's is characterized by images of massive parties, fancy cars and beautiful mansions. The reason that all of these objects are so vital to understanding the 1920's is because they represent the surge of consumerism that swept the nation during the decade. In the 1920's American citizens were buying an unimaginable amount of goods and products. This provided a temporary boost to the economy. The reason that consumer's went so rampant during this period was due in large part to two factors. The first factor was the modern advertising of the time. Commercials beamed through the radio waves convincing people to buy products that they not only did not need but also couldn't afford. Advertisements of this magnitude were never before seen, therefore the American people were initially vulnerable to them. The second factor that allowed for consumerism to expand so rapidly were the "installment plans" of the time. These plans allowed people to essentially buy things now and pay later. They are comparable to the credit cards of today. As a result people were able to buy many things that they could not afford and many Americans ended up in a large amount of debt. As a result of these factors it appeared as though everyone was doing fine and had a lot of expensive possessions when in reality many people were poor. This is a major part of the false prosperity the was occurring in the 1920's. One of the reasons why none of this was stopped was because of the reduced role of the government in the economy. Had the government intervened, as it did many times during the progressive era, there is a chance that the people could've been protected from being duped into debt and the economy may not have crashed as it did.
Income Gap
One of the biggest reasons for the false prosperity of the 1920's was the income gap that separated the rich from the poor. Although it is true to say that the economy grew during the 1920's, this growth mostly benefited the rich. In fact the richest 1% of Americans increased their wealth by 75% during the era. This occurred while the rest of America only got a 9% increase in wealth. Clearly the majority of economic success of the twenties was controlled by a very small group of people. Obviously people were taking advantage of the decrease in government regulation at the time. The Income gap created the illusion on paper that the entire American economy was growing when in reality this was not the case. The middle class suffered so much during this period that 60% of Americans actually lived below the poverty line and 80% of Americans had no savings at all. Clearly when you think of the roaring twenties you don't think of widespread poverty and a suffering middle class. The reason for this is because most of these economic problems were hidden behind the false veil of consumerism. Problems such as these were allowed to escalate to the extreme levels they were at because the government did not step in and put an end to them. The reason for this is because of decrease in the government's role in the economy due to the new philosophy of Laissez Faire.
One of the biggest reasons for the false prosperity of the 1920's was the income gap that separated the rich from the poor. Although it is true to say that the economy grew during the 1920's, this growth mostly benefited the rich. In fact the richest 1% of Americans increased their wealth by 75% during the era. This occurred while the rest of America only got a 9% increase in wealth. Clearly the majority of economic success of the twenties was controlled by a very small group of people. Obviously people were taking advantage of the decrease in government regulation at the time. The Income gap created the illusion on paper that the entire American economy was growing when in reality this was not the case. The middle class suffered so much during this period that 60% of Americans actually lived below the poverty line and 80% of Americans had no savings at all. Clearly when you think of the roaring twenties you don't think of widespread poverty and a suffering middle class. The reason for this is because most of these economic problems were hidden behind the false veil of consumerism. Problems such as these were allowed to escalate to the extreme levels they were at because the government did not step in and put an end to them. The reason for this is because of decrease in the government's role in the economy due to the new philosophy of Laissez Faire.