Materialism: Finances & Economics throughout the Ages
Throughout the history of the United States, several key events helped illustrate a sense of materialism through different investment, financial and economic situations. With a change in time, comes a change in philosophy and self- motivation in reaching one’s designated standard. People, along with currency, underwent drastic changes due to inflation, which in turn causes changes in mentality of making sums of money. Those who strived for financial success used any means necessary for obtaining the essential amount of capital, whether those methods were moral or corrupt. With each age of time, comes a variety of those who are successful, and in result, a variety of economic conditions.
During the Gilded Age (1865 to 1901), there were numerous forms of investment and economic opportunities given to those who were eligible, but having the eligibility is a whole different situation. Famous economic pioneers such as John D. Rockefeller and Andrew Carnegie are perfect illustrations of how few were able to succeed, and many were left in the slums working hours upon hours in blue-collar jobs. Rockefeller modernized the oil industry, which in turn, brought more profits to a largely oil-consuming market. He became the world’s richest man, and set the milestone of first billionaire. Carnegie, on the other hand, revolutionized the steel industry, another growing essential product to the now booming railroad industry. Those who were able to get involved in the stock market invested in this newly-successful market, hoping to make as much profit as possible. During this period, hidden, and sometimes rueful business deals altered the railroad, and all its associates, into large money-making conglomerates.
After the end of WW1, the United States had a tremendous growth in industry, which led to higher standards of living during the 1920’s. The war economy invested heavily in the manufacturing sector. Agriculture, which was the previous main sector of commerce, was left behind. The value of farmlands fell 30 to 40 percent in the 1920’s. Towards the commencement of the decade, Warren G. Harding was the president who believed in Laissez-Faire capitalism. He advocated police which in turn reduced taxes and regulation. He allowed monopolies to form, and inequality of wealth and income reached its highest level. Harding’s administration was one of the most corrupt administrations in the history of United States. Calvin Coolidge became president in 1923, but believed in non-interventional government. He announced to the American People, “the business of America is business”. By the middle of the decade, the individual productivity rose 40%, but the rewards were going to the owners. One percent of the population was controlling more than 42% of the income. The lower and middle classes were living from paycheck to paycheck. With this, their real income was being reduced, after adjusting for inflation. The concept of “spending today and pay tomorrow,” started in the 1920s. The tax rates were lowered to 25%, and the Supreme Court also favored businesses by striking down labor legislation and nullified the minimum wage for women. In 1929, Coolidge was voted out of office. Herbert Hoover then succeeded the office following the vote. He was not committed to the Laissez-Faire ideology as Mr. Coolidge, and still, people were living in extreme poverty. The bottom 80 percent of the people were not paying taxes, due to low income. There were more goods than buyers, which led to backlog of inventories. The automobile and construction industries that were booming earlier in the decade slowed down. .All these factors led to recession, and eventually to the Stock market crash which began on October 24, 1929. Following this on October 9 was the grand finale, also known as “Black Tuesday”. During this period, losses were close to $16 billion, an astronomical amount of money in such a few number of days.
After WWII, the economy boomed due to the industrial changes and the large amount of production outcome. New inventions emerged, leading to more investment opportunities. The 1950’s were all about the middle class seeking a higher quality of life. Because of the arrival of soldiers, suburbs began to rapidly expand. The GI Bill allowed returning militia to afford low-entry-cost housing with spacious kitchens that included refrigerators, stoves, and washing technology. There is a huge emphasis on normality after the war, causing a suppression of social problems – gender roles were especially emphasized during this time of age. The suburban lifestyle forced its inhabitants to keep the community looking uniform. This approach gave birth to the meaning “Keeping up with the Joneses”. Fast food restaurants and shopping malls also emerged giving suburbs even more convenience. The more Americans spend, the more patriotic they appeared. Large automotive companies such as Ford, General Motors, and Chrysler dominated the market while the television was an advantage for companies to advertise their products. Tupperware began to make its way into housewives life’s because of its image of easing daily routines in the household. The Tupperware companies first began rewarding its employees with their newest products in order to advertise even more.
The 80’s was a time in which the middle class grew in size and the mentality of economic gain had shifted. The new perception of those from the middle and the upper class was to work hard and earn pension. In other words, employees worked vigorously, so that once they retire, they would receive a steady, yet decent gross of income without having to work anymore. People also became speculative of the stock market, buying junk bonds which where extremely risky maneuvers, because of the risk of default. Highly-leveraged transactions, or leveraged buyouts, started to occur between financial sponsors. These transactions, in turn, allowed financial sponsors to, “gain control of a majority of a target company's equity through the use of borrowed money or debt.” It was with this that the famous Savings and Loan Scandal commenced. “Deregulation” occurred, in which restrictions were lowered so much that S&L owners could lend themselves money. The scandal began when the government raised the federal insurance on S&L's from $40,000 to $100,000 even though the typical savings account was only around $6000, creating large sums of debt for people who had no involvement. In turn, many had pensions and savings money reduced and was left with less in the end. Due to the high ranking of S&L owners, when condemned to jail, their sentences were typically one-fifth that of the average bank robber. With the money lost from the S&L scandals, the government could have, “provided prenatal care for every American child for the next 2,300 years, and could have purchased 5 million average homes.”
Valuable External Links
www.fiftiesweb.com/pop/inventions.htm - shows timeline of important inventions through the year; includes inventions during the 50’s
http://beginnersinvest.about.com/od/junkbonds/Junk_Bonds.htm - describes what junk bonds consist of; demonstrates the dangers that come with the bonds and the possible repercussions that result
http://www.inthe80s.com/sandl.shtml - gives a detailed summary of the whole phase of the Savings and Loans scandal; also lists those involved with the scandal
http://en.wikipedia.org/wiki/GI_Bill: an overall summary of the GI Bill including detailed explanations of each sector of the bill and links to further sites for more information.
http://www.pbs.org/wgbh/amex/carnegie/gildedage.html: very detailed summary on Andrew Carnegie during the Gilded Age. This site has great detail from the era.
http://www.bartleby.com/65/la/laissezf.html: about the formation of the doctrine and the philosophy
http://www.whitehouse.gov/history/presidents/cc30.html: gives a brief description of his life. Also shows contributions during his term a president
http://www.things.org/music/al_stewart/history/warren_harding.html: shows events during his life. Explains scandals that he and his cabinet were involved with
http://www.answers.com/topic/roaring-twenties: Exhibits overview of the “Roaring 20’s.” Shows key events throughout the duration of the 20’s that forever changed the history of the United States
http://mutualfunds.about.com/cs/1929marketcrash/a/black_tuesday.htm: Describes events throughout the course of the market crash. Lists personnel directly affected by the crash