KEY TOPICS FOR ESSAY PARAGRAPHS

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Rosamund Burke
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2 KEY TOPICS FOR ESSAY PARAGRAPHS 1. POST-WAR ECONOMIC BOOM 2. STATE-SPENDING/PUBLIC INVESTMENT 3. ENERGY/OIL 4. THE BABY BOOM & SUBURBS 5. LBJ THE GREAT SOCIETY & VIETNAM 6. 60S/70S RECESSION 7. REAGANOMICS 8. FOREIGN COMPETITION

3 1. POST WAR BOOM

POST WAR BOOM BETWEEN 1945 AND 1960, THE US ECONOMY NEARLY DOUBLED IN SIZE AND MOVED FROM A LARGELY RURAL AND AGRARIAN SOCIETY TO AN URBAN AND MANUFACTURING BASED ONE. WHY?

4 POST WAR BOOM BETWEEN 1945 AND 1960, THE US ECONOMY NEARLY DOUBLED IN SIZE AND MOVED FROM A LARGELY RURAL AND AGRARIAN SOCIETY TO AN URBAN AND MANUFACTURING BASED ONE. WHY? HOW WAS THE US DIFFERENT FROM THE OTHER ALLIES AT THE END OF THE WAR? WAR ECONOMY MOBILISED FROM 1939 (LEND-LEASE), EVEN MORE FULLY AFTER 1941 STOPPED PRODUCING CONSUMER GOODS FORD MAKES PLANES INSTEAD OF CARS UNLIKE EUROPE/ASIA/USSR USA SUFFERED ZERO DAMAGE TO INFRASTRUCTURE/THE BUILT ENVIRONMENT

5 FACTORS IN THE POST WAR BOOM LOW UNEMPLOYMENT WAR ECONOMY => HUGE REVENUE FOR THE GOVT TO PAY FOR THE WAR NO CONSUMER GOODS => PEOPLE DON T SPEND THE MONEY THEY WERE MAKING $134B SAVED BY AMERICANS FOR AFTER THE WAR AFTER THE WAR PEOPLE BEGAN SPENDING THIS MONEY ON CONSUMER GOODS: CARS TVS WASHING MACHINES FRIDGES HOMES These products well almost all manufactured in the USA. Huge increases in sales of these items meant more tax to the government to invest in big projects, support for jobs in manufacturing and sales, the development of a new middle class, expanding cities means a boom for builders on and on it goes. The cycle feeds itself.

THE CORPORATION EXPORTING THE AMERICAN DREAM MANY OF THESE PRODUCTS WERE

TO RECOVER IT S MANUFACTURING CAPACITY AMERICAN COMPANIES STARTED TO

CONCEPT SPREADS ACROSS AMERICA SHARED BRANDING AND MARKETING THESE MERGED

6 THE CORPORATION EXPORTING THE AMERICAN DREAM MANY OF THESE PRODUCTS WERE EXPORTED AROUND THE WORLD EUROPE IN PARTICULAR STRUGGLED FOR MANY YEARS TO RECOVER IT S MANUFACTURING CAPACITY AMERICAN COMPANIES STARTED TO MERGE TOGETHER TO FORM LARGER COMPANIES CORPORATIONS. WHY DO COMPANIES MERGE? NOT LIMITED TO MANUFACTURING SERVICES TOO MCDONALD S THE FRANCHISE CONCEPT SPREADS ACROSS AMERICA SHARED BRANDING AND MARKETING THESE MERGED COMPANIES SPREAD AROUND THE WORLD AND BECOME MULTI-NATIONAL CORPORATIONS. AMERICAN COMPANIES LIKE GM, GE, EXXON, MCDONALDS BECOME THE BIGGEST IN THE WORLD

7 2. PUBLIC INVESTMENT

FUELLING THE BOOM: WHY PUBLIC INVESTMENT JM KEYNES: ECONOMIC RECESSION CAN BE HELPED IF THE STATE INVESTS IN THE ECONOMY: GOVT MONEY MEANS MORE DEMAND FOR GOODS AND SERVICES (BECAUSE PEOPLE HAVE

8 FUELLING THE BOOM: WHY PUBLIC INVESTMENT JM KEYNES: ECONOMIC RECESSION CAN BE HELPED IF THE STATE INVESTS IN THE ECONOMY: GOVT MONEY MEANS MORE DEMAND FOR GOODS AND SERVICES (BECAUSE PEOPLE HAVE MONEY TO SPEND) MORE DEMAND MEANS MORE JOBS, TO FILL THE EXTRA DEMAND MORE JOBS MEANS MORE PEOPLE HAVE MONEY TO SPEND ALL THIS MONEY BEING SPENT GIVES THE GOVT MORE TAX INCOME TO SPEND THE GOVT FEARED A RECESSION AFTER THE WAR END OF WAR PRODUCTION MILLIONS OF DE-MOBILISED SOLDIERS HOME AND LOOKING FOR WORK

TO RETURNING SOLDIERS TO SET UP BUSINESSES FREE UNIVERSITY EDUCATION FOR

1945-1955 HUGE SUCCESS BOOM FOR BUILDING BOOM FOR ENTREPENEURS / START-UP

9 WHAT DID THE STATE SPEND MONEY ON? THE GI BILL SERVICEMEN S READJUSTMENT ACT 1944 THE GI BILL LOW INTEREST LOANS TO RETURNING SOLDIERS TO SET UP BUSINESSES FREE UNIVERSITY EDUCATION FOR RETURNING SOLDIERS CHEAP HOME LOANS FOR RETURNING SOLDIERS $20B SPENT BETWEEN HUGE SUCCESS BOOM FOR BUILDING BOOM FOR ENTREPENEURS / START-UP BUSINESSES HUGE INCREASE IN COLLEGE-EDUCATED WORK FORCE ALL THIS MEANS MORE PEOPLE HAVE MORE MONEY TO SPEND => THE ECONOMY GROWS

10 WHAT DID THE STATE SPEND MONEY ON? THE MARSHALL PLAN $14B TO HELP RE-BUILD EUROPE EUROPEAN COUNTRIES BUY AMERICAN MADE GOODS EUROPEAN COUNTRIES ALLOW AMERICAN COMPANIES TO SET UP THERE ALLOWS AMERICA TO MAKE MONEY FROM EUROPEAN RECONSTRUCTION MANY AMERICANS FELT EUROPE OWED THEM IN FACT, EUROPEAN COUNTRIES LIKE THE UK AND FRANCE DID OWE THE USA BILLIONS OF DOLLARS AFTER THE WAR

11 WHAT DID THE STATE SPEND MONEY ON? TRUMAN S FAIR DEAL FDR HAD THE NEW DEAL TO FIX THE GREAT DEPRESSION AND ESTABLISH SOCIAL SECURITY IN THE 1930S TRUMAN S IDEA WAS THE FAIR DEAL TO EXPAND AND DEVELOP FDR S IDEAS UNEMPLOYMENT SOCIAL SECURITY MINIMUM WAGE FEDERAL JOBS

MOTORWAYS (INTERSTATES / FREEWAYS) ACROSS THE COUNTRY BOOM FOR BUILDING AIDS THE

12 WHAT DID THE STATE SPEND MONEY ON? EISENHOWER S INTERSTATES 1956 THE INTERSTATE HIGHWAY ACT $34B TO SPEND BUILDING MOTORWAYS (INTERSTATES / FREEWAYS) ACROSS THE COUNTRY BOOM FOR BUILDING AIDS THE ECONOMY BY LINKING CITIES AND STATES TOGETHER MAKING IT EASY TO MOVE GOODS STILL TODAY, MOST CONSUMER GOODS IN THE USA ARE MOVED BY ROAD

MAJOR SOCIAL REFORMS HIS SUCCESSOR LBJ HAD A PLAN CALLED THE GREAT SOCIETY RID THE

13 WHAT DID THE STATE SPEND MONEY ON? LBJ S GREAT SOCIETY AFTER EISENHOWER, KENNEDY DIED BEFORE BEING ABLE TO MAKE ANY MAJOR SOCIAL REFORMS HIS SUCCESSOR LBJ HAD A PLAN CALLED THE GREAT SOCIETY RID THE USA OF POVERTY SPREAD THE AVAILABILITY AND QUALITY OF HEALTHCARE $800M FROM VIETNAM WAR AND CONGRESS PREVENTED IT FROM BEING BIGGER

14 WHAT DID THE STATE SPEND MONEY ON? THE COLD WAR WAR IS BIG BUSINESS AND WAR IS EXPENSIVE: KOREA VIETNAM THE ARMS RACE THE SPACE RACE DEVELOPMENT AND MANUFACTURING OF NEW TECHNOLOGIES NEW JOBS

15 3. ENERGY / OIL

OIL BLACK GOLD 16 14 US Oil Consumption ENERGY SECURITY MEANS THAT A COUNTRY HAS THE ABILITY TO KNOW IT CAN FULFIL ITS ENERGY NEEDS THE US HAD ENERGY SECURITY THANKS TO IT S

16 OIL BLACK GOLD US Oil Consumption ENERGY SECURITY MEANS THAT A COUNTRY HAS THE ABILITY TO KNOW IT CAN FULFIL ITS ENERGY NEEDS THE US HAD ENERGY SECURITY THANKS TO IT S HUGE OIL DEPOSITS EG ALL OF TEXAS CONSUMPTION OF OIL IS A GOOD INDICATOR OF ECONOMIC PROGRESS USING MORE OIL = MORE STUFF BEING DONE US Oil Consumption

17 US CONTROL OF GLOBAL OIL BEFORE THE OIL CRISES OF THE 1970S US / US ALLIED INTERESTS CONTROL 85% OF ALL OIL IN THE WORLD PRICE OF OIL IS LOW - $2 (TODAY = C. $80-100) MACHINERY AND TRANSPORT COSTS FOR THE ECONOMY ARE LOW

18 NUCLEAR POWER THE POTENTIAL OF NUCLEAR POWER WAS DISCOVERED DURING THE WAR TO CREATE A WEAPON OF MASS DESTRUCTION. AFTER THE WAR, IT WAS TURNED TO CIVILIAN USE: POWER GENERATION BY 1970, THE US HAD 100+ NUCLEAR POWER STATIONS BOOM FOR BUILDING NEW JOBS IN TECHNOLOGY

19 4. THE BABY BOOM & THE SUBURBS

20 LET S HAVE KIDS! FOR SOME REASON, AFTER THE WAR, AMERICANS STARTED TO HAVE MORE CHILDREN THAN THEY USED TO. LOTS MORE. FROM THE BIRTH-RATE INCREASED ENORMOUSLY THIS PERIOD IS CALLED THE BABY BOOM PEOPLE BORN DURING THE PERIOD ARE SOMETIMES CALLED BABY-BOOMERS

21 ECONOMIC EFFECTS OF THE BABY BOOM MORE KIDS (AND => MORE PEOPLE) MEANS MORE: CLOTHS TOYS FOOD SCHOOLS HOUSING LEISURE FACILITIES SHOPPING/SWIMMING POOLS ETC BOOM TIME FOR: MANUFACTURING BUILDING SERVICES STATE JOBS IN EDUCATION AND HEALTHCARE

22 THE BABY BOOM LEADS TO SUBURBS MORE PEOPLE STARTED MOVING, WITH THEIR NEW FAMILIES, TO TOWNS AND CITIES THEY COULDN T ALL FIT. THE SOLUTION: SUBURBS PURELY RESIDENTIAL AREAS ON THE OUTSKIRTS OF TOWNS AND CITIES DEVELOPERS WHO OWNED LARGE AREAS OF LAND AROUND CITIES MADE FORTUNES BUILDING PURPOSE BUILT SUBURBS WITH THOUSANDS OF HOMES AND ALL THE AMENITIES THESE NEW COMMUNITIES NEEDED

TOWNS/CITIES OR IN PURPOSE BUILT INDUSTRIAL AREAS SO SUBURBAN DWELLERS HAD TO DRIVE TO WORK BOOM FOR

23 SUBURBS = ECONOMIC BOOM BOOM FOR BUILDERS BOOM FOR MANUFACTURING ALL THESE NEW HOMES NEEDED FRIDGES/WASHING MACHINES ETC BOOM FOR CAR MANUFACTURING FACTORIES AND WORKPLACES WERE STILL IN THE TOWNS/CITIES OR IN PURPOSE BUILT INDUSTRIAL AREAS SO SUBURBAN DWELLERS HAD TO DRIVE TO WORK BOOM FOR SERVICES THESE NEW COMMUNITIES NEEDED BANKS, SCHOOLS, HOSPITALS, RESTAURANTS, SHOPPING MALLS, CINEMAS, SWIMMING POOLS

27 EXPANDING CITIES THE ONGOING BOOM MEANT PEOPLE WERE WEALTHIER AND FELT MORE MOBILE. MANY BEGAN TO MOVE TO PLACES THAT WERE NICER - THE SUN BELT AIR-CONDITIONING IS INVENTED (1945) LOS ANGELES OVERTAKES CHICAGO AS AMERICA S SECOND LARGEST CITY OTHERS: DALLAS, HOUSTON, MIAMI, PHOENIX, ATLANTA, TAMPA (ALL 4M ) CALIFORNIA BECOMES THE MOST POPULOUS STATE

28 5. LBJ, THE GREAT SOCIETY & VIETNAM

29 WHAT GOES UP MUST COME DOWN CAPITALIST ECONOMICS RUNS ON A BOOM/BUST CYCLE. THINGS ARE GOOD OR THINGS ARE BAD. THEY RE RARELY JUST OK FOR VERY LONG PERIODS.

JFK S NEW FRONTIER JFK S ELECTION IN 1960 (SUCCEEDING EISENHOWER) IS OFTEN SEEN AS A SHIFT IN AMERICAN THINKING BABY BOOMERS ARE STARTING TO COME OF AGE KENNEDY WAS YOUNG AND ENERGETIC HE REPRESENTED

30 JFK S NEW FRONTIER JFK S ELECTION IN 1960 (SUCCEEDING EISENHOWER) IS OFTEN SEEN AS A SHIFT IN AMERICAN THINKING BABY BOOMERS ARE STARTING TO COME OF AGE KENNEDY WAS YOUNG AND ENERGETIC HE REPRESENTED A MODERN, CHANGING AMERICA HE WANTED TO IMPROVE CIVIL RIGHTS, EXPAND SOCIAL SECURITY AND TACKLE POVERTY HE ALSO HAD TO BE SEEN TO BE STRONG ON DEFENCE SO HE INCREASED SPENDING ON THE MILITARY TO PAY FOR ALL THIS AMERICA BEGAN ALLOWING A BUDGET DEFICIT

31 LBJ S GREAT SOCIETY & VIETNAM LBJ DECLARED A WAR ON POVERTY AND WANTED TO SPREAD ACCESS TO QUALITY HEALTHCARE AND EDUCATION OF POORER AMERICANS. THIS WAS GOING TO BE COSTLY - $800M DURING HIS PRESIDENCY HIS PLAN WAS SCUPPERED BY THE WAR IN VIETNAM IN 1968, THE US SPEND $100B ON THE WAR WITH JOHNSON TRYING TO SPEND MONEY AT HOME TO TACKLE POVERTY AND HAVING TO SPEND IT IN VIETNAM TO ENFORCE THE POLICY OF CONTAINMENT, GOVERNMENT BORROWING SKY-ROCKETED

THE FEDERAL DEFICIT HTTP://WWW.DAVEMANUEL.

32 THE FEDERAL DEFICIT

33 6. 60S/70S - RECESSION

34 THE END OF THE BOOM LATE 1960S INCREASED GOVERNMENT SPENDING / DEFICIT = HIGHER INFLATION HIGHER UNEMPLOYMENT DECLINE IN MANUFACTURING / PRODUCTION PEOPLE WERE SPENDING LESS GLOBAL PROBLEM => AMERICAN EXPORTS ALSO FELL TO FIX THESE ISSUES, THE GOVERNMENT RAISED INTEREST RATES THIS MADE IT HARDER FOR PEOPLE TO GET CREDIT

35 1973 CRISIS IN THE MIDDLE EAST THE YOM KIPPUR WAR BETWEEN AN ALLIANCE OF ARAB STATES AND ISRAEL NEARLY RESULTED IN ISRAEL S DESTRUCTION. INSTEAD ISRAEL WON AND ASKED AMERICA FOR HELP FOR FUTURE SECURITY. AMERICAN OFFERED TO SELL ISRAEL C.$2.5B WORTH OF ARMS PLANES/SUBMARINES ETC THE BOMB??? THE ARAB STATES OF OPEC (WHO CONTROLLED LOTS OF OIL) RETALIATED BY HIKING THE PRICE OF OIL IMPACT ON US MANUFACTURING IMPACT ON US CONSUMERS INFLATION INCREASED & UNEMPLOYMENT INCREASED.

36 1970S STRUGGLING FOR CONTROL HIGH UNEMPLOYMENT + HIGH INFLATION + LOW GROWTH AREN T SUPPOSED TO HAPPEN AT THE SAME TIME, SO NO ONE WAS SURE WHAT THE CORRECT SOLUTION WAS. THROUGHOUT THE 70S, VARIOUS AMERICAN LEADERS TRIED TO INTERVENE TO FIX THE ECONOMY: QUANTITIATIVE EASING THEY PRINTED MORE MONEY, SO THERE D BE MORE TO SPEND INCREASED INFLATION, AS THE $ SIMPLY WASN T WORTH AS MUCH INCREASE INTEREST RATES: HARDER TO ACCESS CREDIT BUSINESS GO BUST HIGHER UNEMPLOYMENT LOWER TAXES MORE MONEY TO SPEND IN YOUR POCKET LESS MONEY FOR THE GOVT TO FUND ITS OWN SPENDING

37 1970S: MANUFACTURING -> TECHNOLOGY THROUGHOUT THE RECESSION OF THE LATE 60S AND 70S, MANY MANUFACTURING JOBS WERE LOST AND THEY NEVER CAME BACK. NEW JOBS, WITH POTENTIAL FOR SUCCESS AND GROWTH WERE IN NEW HI-TECH OR SCIENTIFIC FIELDS LIKE PHARMACEUTICALS THAT REQUIRED A SKILLED WORK FORCE THE BULK OF AMERICA S WORKFORCE WERE UNSKILLED OR AT LEAST, NOT COLLEGE EDUCATED AND THEREFORE COULDN T ACCESS THESE POTENTIALLY LUCRATIVE NEW CAREERS.

IRAN S NEW LEADER CALLED AMERICAN THE GREAT SATAN.

38 1979 CRISIS IN THE MIDDLE EAST, AGAIN THE PEOPLE OF IRAN OVERTHREW THE AMERICAN-BACKED SHAH IN A POPULAR ISLAMIST REVOLUTION IN IRAN S NEW LEADER CALLED AMERICAN THE GREAT SATAN. IRAN STOPPED SELLING OIL TO AMERICA TENSIONS ACROSS THE REGION WERE HEIGHTENED. EFFECT ON ECONOMY?

39 7. REAGANOMICS

40 RONALD REAGAN, FORMER ACTOR THE ECONOMY WAS ONE OF THE MAJOR ISSUES OF THE ELECTION WHEN REAGAN BEAT JIMMY CARTER IN 1980 (AS WELL AS THE COLD WAR AND THE IRAN HOSTAGE CRISIS). REAGAN CHARMED AMERICA AND WON BY A LANDSLIDE ON A PROMISE TO FIX THE ECONOMY AND PUT AMERICA BACK TO WORK

41 1980 THE SCENE THE ECONOMIC SITUATION ON HIS ELECTION WAS GRIM: 10%+ UNEMPLOYMENT INTEREST RATES AT 20% FACTORIES IDLE ACROSS THE COUNTRY GERMANY AND JAPAN BECOMING COMPETING GLOBAL ECONOMIC POWERS PEOPLE WERE STARTING TO BUY MORE FROM THERE THAN FROM AMERICA: DO YOU WANT A VOLKSWAGEN, A TOYOTA OR A BUICK?

42 REAGANOMICS SIMPLE: CUT TAXES PEOPLE KNOW HOW TO SPEND THERE MONEY BETTER THAN THE FEDERAL GOVT. IF YOU KEEP MORE OF THE MONEY YOU EARN, YOU WILL WORK HARDER. CUT WELFARE SPENDING PEOPLE WHO ARE WORKING SHOULDN T PAY FOR PEOPLE WHO ARE NOT WORKING. THEY NEED TO GO OUT AND GET THEMSELVES A JOB!

REAGANOMICS SUCCESSES HUGE TAX CUTS, ESPECIALLY FOR THE WEALTHY CONSUMER SPENDING AND ECONOMIC GROWTH IMPROVED INFLATION FELL SIGNIFICANTLY (13% IN 1981 TO 4% IN

43 REAGANOMICS SUCCESSES HUGE TAX CUTS, ESPECIALLY FOR THE WEALTHY CONSUMER SPENDING AND ECONOMIC GROWTH IMPROVED INFLATION FELL SIGNIFICANTLY (13% IN 1981 TO 4% IN 1989) UNEMPLOYMENT DOWN TO LESS THAN 5% FROM MORE THAN 10% AVERAGE INCOME UP 20% THOUSANDS OF NEW MILLIONAIRES HE BEAT WALTER MONDALE IN A LANDSLIDE IN 1984

44 REAGANOMICS FAILURES HUGE INCREASE IN MILITARY SPENDING $1.2T IN 1982 WITH LOWER TAXES, THERE WAS LESS MONEY COMING IN TO PAY FOR THIS SO IT HAD TO BE PAID FOR WITH HUGE GOVERNMENT BORROWING REAGAN INCREASED THE US NATIONAL DEBT IN HIS 8 YEARS BY 3 TIMES MORE THAN ALL PREVIOUS PRESIDENTS COMBINED THE AVERAGE INCREASE IN PERSONAL INCOME WAS SKEWED BY THE HUGE INCREASE IN WEALTH FOR THE ALREADY WEALTHY. POORER AMERICANS GOT POORER UNDER REAGAN AND URBAN POVERTY INCREASED.

45 8. FOREIGN COMPETITION

46 POST WAR DOMINANCE TO THE EFFECTS OF FREE TRADE AFTER THE WAR, AMERICA WAS THE DOMINANT GLOBAL ECONOMIC POWER JAPAN AND EUROPE WERE IN RUINS AND STRUGGLING TO FEED THEMSELVES WITH AMERICAN HELP, THE REST OF THE WORLD BEGAN TO CATCH UP BY THE 1980S, JAPAN AND EUROPE (ESPECIALLY GERMANY) WERE COMPETING WITH AMERICA FOR WORLD TRADE AND AMERICANS STARTED BUYING GOODS FROM THESE PLACES INSTEAD OF AMERICAN MADE GOODS EG VOLKSWAGEN/TOYOTA FREE TRADE MEANT THE AMERICAN ECONOMY SUFFERED WHEN TIMES WERE BAD FOREIGN MADE GOODS WERE CHEAPER THAN AMERICAN ONES.

47 SUMMARY

Why was 1968 an important year in American history?

Why was 1968 an important year in American history? Essential Question: In what ways did President Nixon represent a change towards conservative politics & how did his foreign policy alter the U.S. relationship with USSR & China? Warm-Up Question: Why was