Previous

The Economic Boom of the 1950s and '60s

     

Aspects of the Economic Boom

a. Affluence

    •  1958: Kenneth Galbraith’s book: The Affluent Society.

    •  By 1960: TVs: up 3m-55m (1950s), 530 stations; Cars: up 25m-60m (1945–60) → US Standard of Living = 3x UK.

b. Suburbs

    •  1960: 25% of Americans in suburbs, > 60% owned homes.

c. Prosperous Middle Class

    •  1950s = '' of the Middle Class (claimed NY Times’ reporter Jim Tankersley).

    •  Salaries > 2x their grandchildren’s today, many 'white-collar' jobs.

    •  Strong unions (e.g. AFL‐CIO) = increased wages, better working conditions, + leisure, - debt.

d. Economic Growth

    •  US economy +37% in 1950s.

    •  Dow Jones index 1,000 (1966).

    •  Growth in large corporations, electronics, military, aerospace.

e. Consumerism

    •  1st : Stockdale Center, Minnesota (1956).

    •  Status via conspicuous consumption = pathway to happiness.

f. Teenagers

    •  Economy targeted (1st time in history they had $ to spend).

g. Sham!

    •  35% lived below poverty line, notably:

       -  Appalachian ‘’, Mexican/Hispanic Americans, Native Americans.

       -  South < North in wealth.

       -  ⅔ elderly had incomes < 25% of avg wage.

       -  African American poverty = 3x white Americans.

 

Causes of the Economic Boom

a. American Dream

    •  Originally = freedom, equality, prosperity (Truslow Adams, 1931).

    •  Post-WWII: hijacked and became about wealth/possessions = identity, status.

    •   in popular culture: A Tree Grows in Brooklyn (Betty Smith, 1943), TV shows (e.g. Leave It to Beaver).

    •  Advertising = stressed that money & possessions → happiness.

    •  Consumer credit → easier purchasing.

b. International Trade

    •  1944 agreement = US$ became the basis of global trade.

    •   rebuilt Europe, which bought US goods.

    •  1947 General Agreement on (GATT )= ↓ tariffs, ↑ trade.

c. Demand

    •  $200b war bonds spent on homes, cars, consumer goods.

    •   → more population, demand.

    •  Growth of suburbs → more demand for cars, goods, services.

d. Government Policy

    •  GI Bill = low-cost mortgages, business loans, education → ↑ skills, homeownership.

    •  Truman’s = increased minimum wage, slum clearance (failed on civil rights).

    •  Eisenhower → businessmen in govt, Keynesian economics, Interstate Highway System (1956).

    •  Govt surplus crops sold as foreign aid → increased farmers' prosperity.

    •  ↑ investment in higher education → skilled workforce.

e. Industrial Modernisation

    •  Advances in → greater productivity, e.g., TVs: $500 (1949) → $200 (1953).

    •  Big corporations = economies of scale.

    •  R&D → aerospace, electronics, pharma advances.

f. Jobs, Wages, Unions

    •  Growth of (+ Truman’s Fair Deal) → more wages → more spending → economic growth.