The Roaring Twenties (1920-1929)
Presidents Harding and Coolidge wanted a "return to normalcy", which would be the reduction of government intervention that was brought about during the Progressive Era and WWI. Presidents Harding and Coolidge sought to demobilize the nation by lifting the economic controls, bringing U.S. troops home to enter the civilian labor force, and leading the country into prosperity during the 1920s.
The recreation of the twenties was different from those during the Progressive Era or the "Gilded Age" for several reasons. New forms of entertainment were now readily available to the American public, such as the radio, the motion picture, jazz music, spectator sports, and all sorts of foolish fads. The philosophy behind recreation and entertainment changed as many American attempted to forget the problems and philosophical issues of the day by engrossing themselves in frivolity. Also, thanks to the industrial age, Americans had more free time and more money to spend then ever before.
During the twenties, many Americans were swept up by materialism. Religious liberalism and humanistic philosophies began to undermine the very foundation of American ideals. The lifestyles of many evidenced lax moral standards, and the American family began to lose its influence to build strong moral character. Each of the liberal and secular philosophies that rose up and attacked America's heritage of biblical Christianity and personal liberty.
The Great Depression (1929-1939)
Stock prices surged upward between the spring of 1928 and the spring of 1929. By June, many stocks were greatly overpriced, but industrial production had begun to decline. At first, several major investors began to reflect the decrease in production. By September, stock prices had begun to drop steadily as more and more people tried to sell. The stock market crash began on Thursday, October 24, but several influential banking houses managed to stabilize the market for a few days. Then on October 29, 1929, the Great Crash took place when stock prices plunged downward and a record 16 million shares changed hands. Three major causes of the Great Crash were (1) easy credit, (2) careless and risky investing on the stock market, and (3) the manipulation of the U.S. money supply by the Federal Reserve.
1. Banking influence - easy money and credit
The Federal Reserve kept interest rates low in the 1920s, making it easy for businesses and individuals to take out loans. This policy encourage debt on a broad scale.
2. Risky Investments & Bankrupt businesses - selling off of stock
Many people invested in the stock market in the 1920s. As stock prices surged upward, some investors practiced speculation; ignoring the true value of stocks, they tried to buy stock while the price was going up, hoping to sell it at a higher price. Thus, many stocks were traded at prices far above their actual value. Some investors even took out loans to purchase stock "on margin," paying as little as 10 percent of the stock price in cash and securing a loan to cover the balance. Such careless and risky investments made for a very unstable stock market.
3. Government intervention & the Federal Reserve
Behind the easy credit problem was the Federal Reserve, which kept interest rates low and encouraged the expansion of the money supply. Government interference in the free market economy played a key role in the severity of the Depression. America's economy might have recovered much sooner if the federal government had not manipulated the money supply. The Great Depression could possibly have been averted if people had been responsible with their money, avoiding debt and investing wisely, and if the government had not interfered with the economy.
5. FDR and the New Deal
The president during the Great Depression was Franklin Delano Roosevelt (FDR). He was president for four terms (1933-1945). FDR's policies were influenced by the British economist John Maynard Keynes. Keynesian economics believed that the government should be responsible for the well-being of the country, believing the great problem behind economic depression is unemployment. The ideas led to legislation aimed at "priming the pump" and "spending the nation into prosperity." This is different from the idea in the Declaration of Independence (government changing from protector to provider). FDR will not only create the conditions for happiness and prosperity, but now should actually create happiness and prosperity by providing federally generated jobs, housing, income and old-age pensions. FDR's three R's were relief, recovery and reform. The government creates jobs and projects for the country (i.e. freeway construction, bridges, parks, schools, hospitals, etc.). The long-term result is a waste of money, taking money from people and no creation of growth.
The New Deal called upon the federal government to bring immediate relief to the needy, to bring recovery to the nation's economy, and to bring strong political and economic reforms that would prevent such disasters from recurring. The Founding Fathers designed the federal government primarily to protect the individual liberties of American citizens, but the New Deal expanded the powers of the federal government to provide for the basic needs of American citizens. Thus, the role of government changed from protector to provider.
The progressives believed that government ought to intervene when problems arise. Throughout the first two decades of the 20th century, they sought to increase the role of government in business, industry, transportation, and communication, equating positive government action with progress. This philosophy resurfaced in the 1920s when certain politicians and farm groups tried to get government aid for American farmers. Of all the deceptive philosophies that affected America during the twenties, socialism probably had the greatest influence on the federal government. The result would be seen in the 1930s, when FDR's New Deal introduced government control into many areas of American life.
4. Welfare (free money)
The New Deal resulted in more government intervention and in greater dependence
on the federal government for handouts. The effects of the New Deal can
be seen today in the Social Security system, Medicare, various welfare
programs, and the numerous federal regulatory agencies in operation
today. Many Americans depend on the government for their daily needs,
and all suffer from excessive government regulation in one way or
another.
People should be taken care of by private institutions like churches, instead of the federal government.
5. Entitlement Attitude
The entitlement attitude is thinking that the government must provide for me (a job, education, etc.). "I deserve this." The Robin Hood philosophy does not work.
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