The Roaring 20s: A G rowing Economy

The Roaring 20s: A Growing EconomyCh 8.2

Monday, March 26, 2012•Daily Goal: Understand what factors

fueled the growing economy in the 1920s.

Custom Made v Mass ProducedComparison Questions

Custom Made Mass Produced

Which is cheaper?

Which is more reliable?

Which can be made faster?

Which is made by an expert?

Which can be made by unskilled workers?

Why cars sucked before Ford…•Too expensive for the average American•Hand-built by skilled metal workers-

increased prices•They took a long time to make each-

increased prices•Each part was made from scratch-

increased prices, made them unreliable and almost difficult to repair.

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ASSEMBLY LINE PRODUCTION

New Industries and Prosperity• Americans enjoyed higher wages and

more leisure time than ever before.•  New technologies, such as automobiles,

airplanes, and radios, led to new industries, while new methods of production increased output and lowered the prices of consumer goods.

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$265 =$2742 IN 2002 DOLLARS$685.00 =$7089.00 IN 2002

DOLLARS$775.00 =$7863.00 ON 2002

DOLLARS

A New Way of Making Everything•Mass Production was improved by the

Assembly Line introduced by Ford, which divided production into simple jobs for unskilled workers.

•Reduced: costs/prices, production time.

Prices tumbled!• 1908 Ford Model T (pre-assembly line) $850• 1914 Ford Model T (assembly line) $490• 1924 Ford Model T (improved assembly line)

$295• Cheaper cars=More buyers! More sales!

Radio• Popular

▫ Recorded music▫ Sporting events (baseball) ▫ Elections + news

• 1st commercial broadcast KDKA (Pitt) – Harding/ Cox election results

• Growth in mass media = growth of national culture

Discussion Questions•What messages do Advertisers use to sell

you a product?

Which sounds like a better deal?•Your shopping for a nice new flat screen

TV and decide on 60 inch that costs $1200.

•The store is currently offering a monthly installment plan, which reduces the cost to just $50 a month.

•Which would you rather pay? $50/month? $1200 cash?

Easy Credit fuels the Car Industry•Your car has just broken down.•You go to the dealer and they tell you

replacing the transmission is $2000, far more than you have.

•A salesmen then tells you that you can have a brand new car for a low monthly payment.

•You use your repair money for a down payment and buy a new Honda Civic for $250/month.

Discussion Questions•Is debt bad?•A Car loan is debt.•A Home Mortgage is debt.•Does credit (loans) encourage people to

spend more?•Does credit (loans) encourage people to

overspend?

Mass Consumption•advertising and easy credit encouraged

consumer spending and fueled a booming economy.

Growing Wages• Ford paid his workers an unheard of

$5/day•Used high wages to discourage workers

organizing into unions.

Farmers Struggle•Farmers had borrowed to increase

production during WWI and when the War ended they had no way to pay back loans they had taken out

•A “silent depression” began in agriculture.