How Did The Roaring Twenties Affect The Economy

World War I (1914-1918) or “The Great War” had repercussions across the globe in all domains of everyday life, as European nations attempted to rebuild their destroyed cities and the United States adopted a position of isolationism. The interwar years (1919-1938) were a dichotomous period in the United States, qualified by both a recuperation from the war and the Great Depression through groundbreaking social and economic reforms, and a buildup of tension in several domains. Thus the government implemented policies to compensate for the economic lag caused by its major intervention in Europe, only to create a “bubble” of happiness and prosperity commonly referred to as the “Roaring Twenties,” which upon bursting with the Stock Exchange Crash
It came to be defined as a time of mass consumption and mass production, as technological advancements and the development of consumer goods increased population happiness and helped the economy attain an unparalleled level of growth. But this American Dream, though romanticized in later literature, was in reality not enjoyed by the majority of society. Indeed, although this period was characterized by major social changes, including women’s right to vote in 1919 with the 19th Amendment, the United States still practiced a strict control over the amount of immigrants allowed to enter, and racism was rampant throughout all 50 states with the race riots of 1919. These sentiments were formalized in US policies, as the government began to change its attitude towards immigrants, implementing restrictive legislation likee the Emergency Quota Act of 1921 which introduced numerical restrictions on immigration, followed by Immigration Act of 1924. The purpose, according to the US Department of State Office of the Historian, was to “preserve the ideal of American homogeneity.” This public preference for a homogeneity of ethnicities was reflected through several cultural clashes over the decade, such as between the Anglo-Saxon, protestant culture of native-born Americans and the immigrant Jews or Catholics, whose family and
However, this “Mass Consumption, Mass Production” mindset led to a growing division between rich and poor, as 42% of Americans were living under the poverty line in 1921 while new rich citizens enjoyed lavish lifestyles. Moreover, the landslide victory of of Republican Warren G. Harding in 1920 marked the beginning of a predominantly conservative governmental policy throughout the 1920’s, based on a widespread belief that an emphasis on private businesses would lead to a spread of prosperity to the entire population. As such, the 1930 Smoot-Hawley Act gave US manufacturers a monopoly of the domestic market, and increased rates to such levels that other nations retaliated with anti-US import laws. Taxes were cut, because Treasury Secretary Andrew Mellon believed in “Giv[ing] tax breaks to large corporations, so that money can trickle down to the general public, in the form of extra jobs.” As such, under Harding’s administration, private businesses received substantial help in the form of loans and subsidies. Additionally, the war had led to a soar in demand for farm products, which had stimulated production and innovation in agriculture. However, by the