January 26, 2003
What Goes Up must come Down
We've all heard the phrase "What goes up must come down". This phrase also described the United States economy of the 1920's. The first World War made the U.S. a world power. While other countries were rebuilding the U.S. has overseas territories, plentiful resources, and began to lend money overseas s the American economy expanded.
After the war ended, the economy dipped briefly. This occurred due to high unemployment among soldiers returning home from war. The stagnation didn't last long though soon the economy revived and the roaring twenties were born.
The auto industry was the engine that ran the American economy. Auto sales tripled in the 1920's, and the moving assembly line made it cheaper than ever to buy a car. The car companies also started the installment plan in the 1920's that made cars affordable for all Americans. An American could buy a Model T in any color as long as it was black.
Automobile Production's effect spread far beyond car factories. It spurred the steel, rubber, and petroleum industries. It also began the trend of moving away from the cities and to the suburbs. People could now live farther away from their place of employment and drive on new roads and highways to work. During this time of economic prosperity energy use tripled, home appliances were invented including: the first automatic washing machine, the electric iron, vacuum cleaner, telephone, and radio. The income of the average American worker rose to new heights. With more money to spend you even began to see the invention of the chain store.
As I stated earlier What goes up must come down. This was true in the case of the economy in the 1920's. The stock market crash in late 1929 was the beginning of the end for this prosperous time. Many economists believe after the stock market crash there was a huge decrease in consumer spending which hurt the economy even more leading to the...