Recession of 1920 The United States fell into a deep recession because the returning troops flooded the labor market, the massive post war debt and the wartime production levels could not meet the peacetime demand. Also the Fed raised the interest rate which restricted the money supply. By 1921 the unemployment rate reached 11.7%
Election of 1920 Even he though Wilson was completely immobile from the stroke he blocked the nomination of his son in law in hopes it would lead to a third term
Election of 1920 Roosevelt had attacked Taft for not being Progressive enough but then spent eight years attacking Wilson for being too progressive, especially after his youngest son was killed in World War I. Roosevelt was still very popular and probably could have won in 1920 but his health failed him and he died in 1919.
Election of 1920 Warren Harding James M. Cox In the first election that big government faced off against limited government Harding won by the most votes in American history with an easy message of………….
Warren G. Harding “Return to Normalcy” But the election of 1920 also saw the rise of a new politician who was the VP nomination more because of his name than his experience…………..38 year old
Franklin D. Roosevelt A year later Roosevelt’s political career would be put on hold when he is diagnosed with polio
Harding’s Response to the Recession Harding’s created the Office of Management and Budget to cut government waste and slash federal spending from 18 billion to 5 billion and lowered taxes and used the surplus to pay off the national debt. The economy began to turn around but Harding never saw it……
Calvin Coolidge Silent Cal Considered the most laissez-faire/limited government President of the 20th Century, Coolidge continued to cut taxes and federal spending and that combined with the Fed’s cut in interest rates led to……
Consumerism Which saw the rise of Hollywood, electric appliances, advertising, Major League Baseball and automobiles Consumerism – economic system that encourages purchasing as many goods as possible
Election of 1924 Calvin Coolidge John W. Davis With the economy booming, Coolidge easily defeats Davis
Election of 1928 Herbert Hoover Al Smith Republican Democrat Hoover was asked by both the Republicans and Democrats to be their nominee but he chose to go with the GOP, he easily defeated Smith who was the first ever Catholic nominee
The Great Depression So what caused it
John Maynard Keynes Ludwig Von Mises and Friedrich Hayek Vs. Austrian Economics Keynesian Economics
Keynsesian Economics Considered the most influential economist of the 20th century Keynes stated that following the stock market crash the government should have pumped money into the economy through deficit spending, this would have created employment and jumpstarted the economy
Austrian School Von Mises and Hayek argued that the depression was caused by too much intervention by the Federal Reserve and the government and that more intervention would only prolong the suffering
Herbert Hoover Hoover tried both schools, originally going with a hands off approach but then went to government interventions like deficit spending, tariffs and tax increases that only made things worse