Transcript From the 50s to 2000 – the changing face of the US economy

 American Dream
 Baby Boom
 “Camelot”
 Company man
 Stagflation
 ARPANET
doc. Ing. Tomáš Dudáš, PhD.
1945 – Starting point
 The country that emerged from WW II was very
different from what it had been four years earlier
 Prosperity had replaced depression
 Inflation was now the number one economic problem
 The U.S. accounted for ½ of the world’s manufacturing
output

With just 7 percent of the world’s population
 The U.S. and the Soviet Union were the only
superpowers left standing
 New international economic order
1950s – decade of prosperity
 Many Americans feared that the end of World War
II and the subsequent drop in military spending
might bring back the hard times of the Great
Depression
 But instead, pent-up consumer demand fueled
exceptionally strong economic growth in the
postwar period
 The nation's gross national product rose from
about $200,000 million in 1940 to $300,000 million
in 1950 and to more than $500,000 million in 1960
 At the same time, the jump in postwar births,
known as the "baby boom," increased the number
of consumers
Number of births in the United States, 1934 to
present
“G.I.” Bill
 The G.I. Bill was an omnibus bill that provided
college or vocational education for returning
World War II veterans as well as one year of
unemployment compensation. It also provided
many different types of loans for returning
veterans to buy homes and start businesses
 By the time the original GI Bill ended in July 1956,
7.8 million World War II veterans had participated
in an education or training program and 2.4
million veterans had home loans backed by the
Veterans' Administration (VA)
The 1950s: The Eisenhower Years
 One big construction boom
 The automobile industry prospered
 Supplied America’s pent up demand and became the world’s
leading exporter of cars
 The advent of television and the Korean War stimulated
the economy
 1946 – 7000 TV sets
 1950 – 50 000 000 TV sets
 The Eisenhower administration
 Ended the Korean War and inflation
 Made no attempt to undo the legacies of the New Deal
 The role of the federal government as a major economic player
became a permanent one
Changing labor force
Changing workplace
 Less “blue collar” jobs – more “white collar” jobs
• 1947-1957  factory workers decreased by
4.3%, eliminating 1.5 million
blue-collar jobs
 Greater participation of women in the workplace –
especially in the tertiary sector
 New corporate culture – “The Company man”
1950s – decade of prosperity
 Keynesianism – Employment Act 1946
 Is a definitive attempt by the federal government to
develop macroeconomic policy
 The act creates the Council of Economic Advisers, an
appointed advisory board that will advise and assist the
President in formulating economic policy
 Goal - to promote maximum employment, production,
and purchasing power
50s – Rise of the suburbs
The New “American Dream”
 1 story high
 12’x19’ living room
 2 bedrooms
 tiled bathroom
 garage
 small backyard
 front lawn
By 1960  1/3 of the U. S. population in
the suburbs.
Rising consumerism
1960s – Years of Change
 The U.S. underwent a kind of golden age of
economic growth
 The middle class swelled, as did GDP and productivity
 Youngest president ever elected in 1960 – John
Fitzgerald Kennedy
 As president, he sought to accelerate economic growth
by increasing government spending and cutting taxes,
and he pressed for medical help for the elderly, aid for
inner cities, and increased funds for education
 Great admirer of FDR
 “Camelot”
1960s – Years of Change
 Lyndon Baines Johnson (1963-1969)
 Wanted to build a “Great Society”
 Started major social programs
 Medicare
 Medicaid
 Food stamps
 Vietnam War
 What had started as a small military action under
Kennedy mushroomed into a major military initiative
during Johnson's presidency
 Advertising became
major industry
Rising Car Culture
 Rapid rise in new car registrations
 1945 – 25 million cars
 1960 – 65 million cars
 The number of 2 car families doubles between 1951 and
1958
 1956 – Interstate Highway Act
 26 billion USD to build highways
 65 000 km of new highways was built
You can do almost everything in your car
1970s – The stagflation decade
 Stagflation - an economic condition of both
continuing inflation and stagnant business
activity, together with an increasing
unemployment rate
 Increasing dependence on oil imports from OPEC
countries
 Oil shocks - OPEC quadrupled oil prices
 The U.S. was hit by the worst recession since the 1930s
 Collapse of the Bretton Wood system
1970s – The stagflation decade
 Jimmy Carter became President in 1976
 Rising budget deficits
 The money supply grew rapidly
 Inflation rose almost to double digit levels
 He faced the Iranian revolution in 1979
 Gasoline prices went through the ceiling
 In October, 1979 the Fed stopped the growth of the money supply
 By January, 1980 the country was in recession


The inflation rate was declining
The nation’s productivity growth was at one percent, one third
the postwar rate