Josiah Jeremiah Davis
American History Since 1865
Professor Morgan Deane
The economy has been something really important to society because of how much it’s affected our daily lives. Not to mention The Great Depression, which was something huge that happened in history. Most presidents had tried to fix the economy in whatever way but they couldn’t fix everything. A lot of Americans faced hardships due to a bad economy at different points in history. It would also be considered a hardship to the government, because of their involvement and what they went through.
First, getting into The Great Depression we see that it had a huge impact on society being that it wasn’t forgotten about it had given rise to new departures in economic theory. (Rothermund, 1996) It caused free trade among different countries to be depleted at the time affecting those other countries and leading them on to lose growth. It’s no doubt that The Great Depression didn’t only affect America but other countries were also very hurt. The monetary theory was introduced with the quantity of money supplied at the time, with introducing a gold standard it was thought to help us out in this tough time. If we could use gold bars in place of cash to help provide for the country it was said we’d be better off. Supply and demand was a big factor, being that it was needed to stimulate the economy. It didn’t help that people weren’t buying anything for the circulation of cash to dwindle through it’s cycle, and therefore help boost the economy. That, in turn caused wages to be lowered hurting that average Joe. International trade had gone up, all the countries were hurting so bad that they had no choice but to raise the price of goods to make the money that they were in need of. From that, countries had no choice but to buy the goods, so they had to go into debt from putting their purchases on credit. At the time pressure was put on the peasant farmer who already wasn’t making a whole lot of money had been taxed heavily due to the need of produce screwing him both ways. Debt, not only has an effect on the past but also the future. When people look into how much debt a person has it has a detrimental impact on lending them money. Also, countries in debt had used gold as a means of trade because they had no choice with the creditors seeing how much they owed reflected back on them giving no choice but too. Taxation was another big thing that affected the duration of The Great Depression. With high taxes, it was a big factor because it played into economy causing different companies and corporations to not bounce back or recover that quickly. Something that affected the economy during the time is war debts from our allies that owed us billions of dollars and we needed it back. It would’ve helped stimulate the economy if they had paid those back in that time of need. During The Great Depression Harlem had become a place for many famous poets, musicians, or famous black figure to move to. (Greenberg, 1997) Also, black political activity had gone up during this time all this causing the Harlem Renaissance. During the 1920s, the population of blacks in Manhattan had gone from 5 to 12 percent. Then by 1930 55 percent of all foreign blacks lived in New York City. Harlem was looked at as the greatest black city in the world, and had a lot of positive energy. Through all the unequal rights blacks had at the time, it caused unemployment to rise in Harlem and the crime rate had increased due to low wages and unemployment both. The discrimination was so bad that blacks were getting such high rental rates due to the landlords being racist. Also, the quality of houses built were very unsafe, and poor that many found it hard to find a place to live. Blacks looked forward to when others would move out of their own homes so that way they would have a nicer place to live if they got to it in time. The large population of Harlem at the time had been because of migrants needing a better place to live and problems from where they came seeking opportunity in this area. The problem that most blacks faced was coming into the area without an education. Unfortunately blacks were discriminated so much in the workplace that they had such low quality positions and couldn’t even be granted supervisor position. Close to 70 percent of all black women in the 1920s were employed with jobs such as domestic and personal services. When the stock market crashed it had affected blacks more than whites. It also had a bigger impact on unskilled workers due to them being more concentrated on in their ranks. Malnutrition had affected so many at this time due to unemployment and low wages. At this time child labor rose to help support their families, as did theft leading to young juveniles. A lot of people had started to apply for aid for the first time in their lives. Having a need for it was a major thing, so people were hoping to get a descent amount of support. With everything going on, different organizations came out and helped struggling families. Such as the Salvation Army providing shelter, food, and clothing. Also there was churches that were helping out the community in whatever way they could. At the year 1933 about 25 percent of the workplace was unemployed. Then in 1940 the numbers changed to 15 percent of the workplace not finding any work. It was proven at the time among black families that the father and son were both working. Their wages and hours worked were also so low that expenses were higher than the amount they had earned. Britain had emerged as more of a world power in the late nineteenth century with how well things went with the military and economic trade and colonial centers all helped this. (Bryan, 2010) Other countries at the time had been seeking Britain’s ways and wanted to be more like them as they were considered a role model. From the early 1870s to the 1890s most of the world have been going through lowering prices, and they called it a Great Depression. This caused a lot of discontent, and wealth to be transferred from the debtor to the creditor. Many in America had complained about the government not letting them have the free mining of silver and it leading to why the money was in such bad shape because of not being able to trade gold. At this time tariffs were tacked on to imported goods, this made domestic goods cheaper than imported goods causing producers to buy domestic instead of foreign. In Britain, protectionist ideas and expansion had up surged when there was competition in the marketplace from Americans and Germans. The governments in France, Russia, Italy, Germany, and Austria-Hungary had based their economic systems on promoting and protecting industry. Many countries had tried what they could to adopt the gold standard, to protect their developing countries by blocking imports, promoting exports, and de-valuing their currencies. Military spending had in part contributed to worldwide inflation. Also, the amount of gold production had increased all around the world when people saw a need for it. Only with military power could countries like Japan be considered full civilized since they were ignorant of nearly all methods of production. Not only gold but also iron at the time were models that shaped state currency choices, and influenced decisions as far as colonies and tariffs went. Not only was the gold standard a primary use for international money, but trade and precious metals were also. Gold had an advantage with it’s exchanged rates being fixed. The government had established centralized banks that were under the expansion of the gold standard, so they couldn’t be state controlled. Prior to the nineteenth century the use of a silver over gold was more of a worldwide currency. When more countries had seen how effective gold was they had adopted the same standards and it’s not until the 1890s that it became common around the globe with people adopting the gold standard. London was considered the world’s financial center, but they also had way higher interest rates then France, Belgium, and the Netherlands. The lend-lease act was passed on March 11, 1941. (U.S. Congress, 2013) This act would allow the U.S. to lend or lease war supplies to any nation that was in dire need of help, and that was important to the defense of the United States. When Winston Churchill had 11 navy warships destroyed in 1940, he looked for help through President Roosevelt. Roosevelt was smart and responded by the exchange of 50 of our destroyers for 99 year leases on British bases in the Caribbean and Newfoundland. At the time, Roosevelt had promised to keep America out of war. In 1941, Roosevelt had signed a military aid bill for Britain to help support them and what they were doing overseas. It was considered buying and not lending, since they were becoming a vital aid to us at the time. It was a time to prepare for war, many didn’t know it yet but Roosevelt was buying security for the meantime pretty much. The United States at this time was nowhere near being ready for war. As far as training, and being unprepared and unarmed. It was time for the United States to get ready for something major to happen. This was the start of us having allies, and forming more of an alliance with other countries overseas. With the end of the Second World War 1945, many Americans had feared for the economy to plunge into another Great Depression. (Rosenberg, 2003) Which turned out to not be true, there ended up being a demand for consumer goods, and investment goods. Even modernization and expansion, housing and exports were in demand. The war had shown that the federal government could have a positive effect on the economy. Toward the end of President Eisenhower’s years there was high levels of unemployment in addition to really high inflation these occurred simultaneously. During this time, many youth were sent back to school, and women back to the kitchen. It was in response to employment, with jobs now wanting to hire people with more of an education, and those not having full time housekeeping responsibilities were more in demand in the workplace. The business community had said the path to employment would be better achieved through the private sector. By the end of 1945, there was very few production controls that had remained. It was thought by that happening it would lead to a more successful peace time economy. Things were looking up for individuals, they were able to spark an increase in purchasing consumer goods, and housing. What really helped was the Income Tax Act of 1945 which lowered people’s income taxes leaving them with more money to spend. Also, a high demand for American exports was something that the U.S. needed. Truman had considered economic growth to be really important for economic policy to grow. He wasn’t clear how this was to happen but wanted to make an effort to make it happen. In 1950 the Truman administration had raised taxes to fight inflation and also finance the war. Something important was to stop the spread of communism, Truman believed that this could be done. After the Korean War in 1953, the amount of defense spending had lowered tremendously. Which really helped since Eisenhower wanted to lower federal spending, he said the government’s role should be to foster price stability. A balanced budget was well looked on at the time, it was thought of as a really good thing. If we had a balanced budget, then we could have a budget deficit that would look more positive. It is said that economists have a notion of defining art, and it’s more in the back of their heads causing an influence on their findings. (Abbing, 2002) Something that’s kind of funny, is when you go out to museums or art galleries, you’re looking for the price tag but can’t seem to find it, or you try finding a store clerk but they are hiding out somewhere. It’s because of the cost of artwork, it’s not cheap causing people to be ashamed of the price when selling it. Art really draws back people when they see the price tag, but in reality artist think their art is special that’s why a lot of them have trouble when thinking of how much they want to price their painting. Cost’s in the arts rise faster than any other production sector, but value is really hard to determine at times because art is something so beautiful to a lot of people. Unfortunately, the government only seems to support art because it has no choice but to. Ex- artists have explained that they made a big mistake when switching to a different career, they felt like they lived in the world of art. So, it was a lot of positive energy, a happy lifestyle and it seemed to help calm people down when they would work on their art piece. The difference with artists is that they rely more on donation then income, they are going against others so they have more of a challenge with having the piece of the art that somebody else would really want. Artists have really changed society for the better with everything that they created, people can keep in their homes and it reminds them of the person who made it, when looking at that piece of art. In the 1990s the U.S. economy had expanded significantly, it being from the higher tax rates in place. (Harris, 2010) Something that had helped the boost in the economy was how well productivity in Information Technology had expanded and investment in Information Technology equipment. It had no bearing on tax decisions, but it was seen as something unique and unanticipated. With the production of I.T. computers, and software the jobs went up and that explained the surge of economic expansion. More people were wanting a computer, or some type of I.T. which caused more of a demand and gave people a lot of work which was great. It was looked at, with a more positive feedback from the marketplace had been a big factor with the 1990s economic expansion. Also, when more production was in effect that had caused I.T. software and devices to be lowered in price because of the advancements. Causing the businesses and consumers to have more of an increased investment. The lessons learned were that the past doesn’t predict the future. Just because something was more successful with economic expansion in the past doesn’t mean it’ll be just as effective in the future. This last month in October 2013, the job growth has surged with the U.S. economy adding 204,000 jobs. (Kurtz, 2013) Which was in fact a big surprise with the government shutdown at the beginning of October because government failing to come up with a budget for fiscal year 2014. That lasted for 16 days, and had 800,000 federal employees temporarily out of work. Since September 2012 the government has been buying $85 billion in bonds each month as an effort to strengthen the job market. It may seem like the economy has gotten a lot better but in fact all the jobs lost since the Great Recession still haven’t been restored. The unemployment rate at this time is close to eleven percent. The government had also cut 12,000 jobs with a third of them being postal service jobs. In conclusion, we see that the economy plays a vital role in our everyday lives. It has a big impact on what jobs are available, how much a person will be taxed, a person’s wages, and it plays a role with government spending. As we have seen, government spending has seemed to go up sky high when the economy would be in decline. Also, a lot of Americans went through many hardships when their wages were garnished, or they were unemployed leaving many with very low standards of living, malnutrition, hard lifestyle, and overall tough times. There was many different decisions by presidents that had to be made throughout 1865 to present. It was not easy for them to decide what would help our economy. The way it was seen, was that most if not all did a great job with trying to boost the economy, and even though they weren’t able to accomplish what they wanted, it still made a huge difference in many lives.
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