The end of prosperity

The period of the 1920s was often referred to as the Roaring Twenties, as it represented a time of significant prosperity and economic growth in the USA.
This era was characterised by an economic boom, driven by new sectors such as automobiles, radios, and movies.
The idea of the American Dream was particularly strong during this period, with many individuals seeing significant improvements in their living standards.

Key factors contributing to the boom included technological advancements, increased consumer spending, easy credit, and the government’s laissez-faire policy.
The Trickle-Down Theory, where wealth from the rich would eventually benefit the lower-income groups, was widely accepted.
The mass production techniques introduced by Henry Ford played a significant role in reducing production costs and increasing factory outputs.

Despite the economic prosperity, not all people or regions benefited equally. Farmers, for example, were suffering from overproduction and falling prices.
The wealth was not evenly distributed. The rich got richer while a significant number of Americans remained poor.
The easy availability of credit led to a culture of over-borrowing and over-spending, creating an unstable economy.
The US economy was also heavily dependent on a few key industries. A downturn in these sectors could have far-reaching effects.

On October 24, 1929, known as Black Thursday, the American stock market crashed. This marked the beginning of the Great Depression.
The crash was a consequence of a variety of factors, including over-speculation in stocks, overproduction of goods, uneven distribution of wealth, and excessive use of credit.
The impact of the crash was disastrous, with banks failing, businesses closing, unemployment rates skyrocketing, and millions of Americans being plunged into poverty.
The economic downturn lasted throughout the 1930s and represented the end of the economic prosperity of the 1920s.

The initial government response to the crisis was inadequate and often ineffective. President Hoover’s policies were seen as too little, too late.
The Election of 1932 brought Franklin D. Roosevelt to power, introducing a period of significant change known as the New Deal.
The New Deal policies aimed to Relief, Recover, and Reform the American economy.
Although the effects of these efforts were mixed, they marked a significant shift in the government’s role in managing the economy and supporting its people.