Presidential politics of the 1920s…

Warren G. Harding Calvin Coolidge Herbert Hoover

Republican Ascendancy

• Republican victories in 1920s.– Progressive regulatory

reform gave way to pro-business sentiment.

• “The business of America is business.”

• President Calvin Coolidge

– Government placed in the hands of business.

+ + =$$REPUBLICAN ECONOMY SUPPORTED LAISSEZ FAIRE AND BIG BUSINESS……….

Lower Taxes Less Federal Higher Strong Spending Tariffs National

Economy

Fordney-McCumber Tariff---1923Hawley-Smoot Tariff ---1930

raised the tariff to an unbelievable 60%!!!

Warren G. Harding

– Return to Normalcy after World War I • Isolationism—avoided

foreign alliances but…• Called for Disarmament

of European nations• War Debts—Europe

debts were scaled back to allow their economies to recover

The Harding Presidency-the Worst?

• Warren G. Harding’s modest successes include the Kellogg-Briand Pact which renounced war as a means of national policy (signed by fifteen nations, but difficult to enforce)

• the Dawes Plan which solved the problem of post-war debt by providing loans to Germany to pay France/Britain who then paid the U.S.

Harding 1920-1924

Business and Politics of the 1920s

• Four main sources of the 1920s economic boom

• Taylorism• Increase in worker

productivity• Automobiles! • Psychology of

consumption

Relations between Government and Big Business.

• High Tariff Policies• Reduction of personal

and corporate taxes.• Less business regulation

by the FTC.• Government price

fixing.• Closed/open shop

policy.

1920s: Tough Times for Unions

• The 1920s hurt the labor movement. Union membership dropped from 5 million to 3.5 million. Why? African Americans were excluded from membership and immigrants were willing to work in poor conditions.

Ford Foundry workers in 1926; only 1% of black workers were

in Unions at the time.

An Economy in Transition

• Prosperous decade:– Unemployment under 5%– Paychecks increased,

prices dropped.

• Economic transition from capital goods to consumer goods

• Consumption the key to prosperity.

Consumerism and Advertising• Shift from stressing the product to

stressing consumer desires– health, popularity, social status– a reliance on emotion

• Influence from World War I propaganda– passion and emotion

• Create fears and desires by centering message: – on the body– on control of the audience– advice from “specialists”

Psychology of consumption

• Radio (KDKA)• Motion Pictures• New Appliances• Advertising

The Impact of the Auto• The auto was the

backbone of the American economy from 1920 through the 1970s. It also profoundly alteredthe American landscape and society.

• Available due to Cost and Credit (installment plan)The Ford Model T was the first car

in America. It came only in black and sold for $290. Over 15 million

were sold by 1927.

How Auto Changed America• Paved roads, traffic lights, motels, billboards• Home design (garages, driveways)• Gas stations, repair shops, shopping centers• Freedom for rural families• Independence for women and young people• Cities like Detroit, Flint, Akron grew • By 1920 80% of world’s vehicles in U.S.

Herbert Hoover

• Followed Harding and Coolidge as business policy

• Efficiency movement – Experts find inefficiency

and fix it– Increase volunteerism

• Stock Market Crashes• Action for Farmers

– Pushed for farm subsidies

• Started to regulate financial institutions

Herbert Hoover…Importance

• The "trickle down" economic theory of President Herbert Hoover was based on the idea that – 1. balanced budgets are essential to economic success.– 2. the Federal Government needs to assume more

responsibility for solving economic problems.– 3. economic growth depends on making increased

amounts of money available to business.– 4. economic stability is the responsibility of Federal

monetary agencies.