A Brief Economic History of the United States

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It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair
- Charles Dickens, A Tale of Two Cities

Why know the history?

Those who cannot remember the past are condemned to repeat it
- George Santayana

AGRICULTURAL DEVELOPMENT
- America had almost limitless supply of land which influenced the countrys economic development.
- Cheap/free lands + many immigrants + early marriages = huge family = increased amount of work force = encouraged technological advancement

- 1915, from 14 M count in 1789, number increased to 100M

AGRICULTURAL DEVELOPMENT
- Increased population = increased market
- Been a target by Japanese manufacturers

- Industrial expansion
- From agriculture to iron, steel, textile & apparel - From agriculture to iron, steel, textile & apparel

The National Railroad Network

- Encouraged mass production, mass marketing and mass consumption
- enabled manufacturers to sell their products all over the country - Lowered prices, increased sales

- Mass consumption enables mass production, while mass production enabled mass consumption.

The Age of Industrial Capitalist

(last quarter of the 19th century)
- birth of American Agricultural Technology
- Increased production

-The great empire builders Carnegie (steel) , Du Pont (chemicals), McCormick (farm equipment), Rockefeller (oil), and Swift (meat packing), among others dominated this era

1900s through World War I

From agriculture shifted to manufacturing

Industrial Development
- a world leader in the production of steel, coal, steamships, textiles, apparel, chemicals, and agricultural machinery due to technological advancements - Trade balance with other countries is positive - Not affected by WWI & WWII, becoming worlds industrial power
- Automobile age (Mass production system of Henry Ford) - First public Educational System

Agricultural Development
- Production stabilized - Agriculture experienced mild prosperity (1900-1913) - In WW I increased production of agricultural products (1920) - Post war, agriculture had a terrible slump - Only until WW II and Federal farm subsidy program was implemented agriculture had been stable

1920s In between wars

Mass-consumption economy, no distinct time of departure

The Roaring Twenties

- 1918, WW I ended, brief depression - 1919, Short economic boom to pent up consumer demand for housing, clothing, & automobiles, high demand for American products & high spending of the government - 1920, Increased pricing, lesser sales - Spreaded use of electricity

- Began & ended in depression

- 1929, stockmarket crash

The Great Depression

(Aug 1929) - stock market crashed

- 1930 Prices declined

- 1931 psuedo-recovery - Federal budget deficit in 1931-32 - 1933 banks closed

World War II to the Vietnam War

- Nation was fighting an all-out war - Prosperity replaced depression - Inflation became an economic worry

WW II & peacetime prosperity, 1940s

- Greatly triggered by 1945 pearl harbor bombing - Unemployment rate was below 2% - Women replaced men who went to war in the workplace - 1939-1944, national output of goods & services nearly doubled - Government spending rose by 400% for defence - 17M new jobs were created - To prevent inflation price & wage controls & ration coupons were implemented - Economy grew by 10-11%

- Produce better than competitors to serve the country (Doris Kearns Goodwin & the remarkable entrepreneurial spirit) - Mild depression in 1945 (economy reconversion for peacetime footing) - Mild depression in 1948-1949 - Rapid economic expansion - 1945 suburbanization, little lands available in the cities - Federally suburbanized interstate highway networks & state local highways, parkways, freeways, & local street & roads were built - Big construction boom - Prospering of automobile industry

Became the worlds leading auto exporter Baby boom Minor recession in 1945 & 1948-49 Inflation Korean war in 1950 brought another wave of price increase

1950s The Eisenhower Year

- Economy was further stimulated by the advent of tv in the early 1950s & by the Korean war - General Eisenhower promised to end the Korean war and end inflation - Continued suburbanized economic growth - No attempt made to undo the legacies of the new deal such as Social Security, unemployment, & regulatory reforms - Federal government as a major economic player had become permanent

Soaring 60s: the Years of Kennedy & Johnson

- Quick rebound from the recession - Embarked on an uninterrupted eight-year expansion - 1964. Major tax cut planned by Kennedy was implemented by Johnson after Kennedys assassination - Medicare, Mediaide, & food stamps incurred federal deficit though money grew quickly - Inflation

From the Vietnam War to the Breakup of the Soviet Empire

The Sagging 70s: the Stagflation Decade

1968, Richard Nixon planned to end the Vietnam war Inflation problem Half-hearted wage & price controls Re-election of Nixon in 1972 1973 worst recession, oil price shock, double digit inflation stagflation stagnation + inflation Gerald Ford became president, followed by Jimmy Carter who suffered the worst economic luck of all - 1979, budget deficits, inflation, Iranian revolution setting off 2nd oil shock - Slowing of productivity growth

1980s: the Age of Reagan

- Ronald Reagan became president: Private enterprise could provide meaningful jobs & spur economic growth - Cut tax rates to induce work & output, subsiding inflation - Inflation was brought under control, but unemployment increased - Federal deficits & foreign trade deficits - 1988 George Bush became president w/ promise of no tax increase, but in his term, he agreed in major tax increase - Deficit continued to rise, recession & unemployment again took place

The State of American Agriculture

- Family farms rapidly vanished - world population outrun food supply as predicted by Thomas Robert Malthus in the early 19th century