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The United States had experienced a decade of change and prosperity in the 1920 s. World War I was over, the boys were home, and new business was booming. There was a consumer goods revolution fueled by a few major industries. One of the most prominent industries was the automobile industry. Automobile sales increased dramatically after World War I. The automobile changed the lifestyle of Americans.
It was now possible to work in the city, but live in a suburban area. Before the automobile, people who worked in the city were forced to live in the city. Now, Americans were opting for the peaceful life of suburbia. This move to suburbia spurred the expansion of other industries. The road construction industry was booming highways had to be built for the automobiles.
The construction industry was booming single-family dwellings had to be built in suburban areas. Other industries that prospered were electric appliance businesses, electronics, and the motion picture industry. In the 1920 s, raw materials and labor came cheap. This enabled businesses to have enormous profits. Another invention that changed the lives of Americans during this time period was the radio. Now it was possible for the entire nation to be exposed to the same ideas and thoughts.
Most families had a radio and were able to listen to sports events and political speeches along with the rest of the nation. It was now possible to influence the people in ways that had not been available before radio. Now, individual thoughts and lifestyles could be easily swayed through mass communication. The unemployment rate was low; most people had jobs and were enjoying their new prosperity. Average, middle-class families were able to buy an automobile, a home in a suburban area, and new appliances.
People were not buying just for need; they were now buying for pleasure. But, most of the purchases were bought on credit. This is just the beginning of a domino effect that is about to besiege the nation. Meanwhile, the stock market is experiencing an all time high. The stocks seem to go up and up.
There were several small scares when the market dipped, but it recovered and the people were flocking to the market. There was such frenzy over the bull market that average people were being caught up in the excitement. Middle-class families were dipping into their savings and investing their entire life savings intothe stock market. Those who did not have enough to buy the stock would buy it on margin, borrowing a percentage of the stock value from the bank and using their homes, land, and other property for collateral.
Everyone wanted to become rich. While Americans were enjoying the good life, and manufacturers were steadily producing goods, they could not see that the market was being saturated with products that could not be used. More cars and appliances were being produced, but no one needed them. The results were disastrous. It took a few years for the stock market to reflect these findings, the stock was overvalued and that the economy had actually failed four years before. When the stock market crashed there was financial panic.
The brokers made margin calls to their customers, who could not pay. The banks were failing and were forced to close. The people lost everything. There was no work, no food, and no money. The government tried to fix the problem, but made all the wrong decisions.
They tried to balance the budget by laying people off work. This took money out of the economy. The Federal Reserve System raised rates, which also took money out of the economy. It would take the New Deal, and a second World War to pull this country out of the depression.
Free research essays on topics related to: stock market, industries, construction industry, automobile, middle class families
Research essay sample on Middle Class Families Stock Market
