US Policy: 1920-1932 THE POLITICS OF NORMALCY. Harding’s Fiscal Policy Harding was committed to the free enterprise system Characterized by private.

US Policy: 1920-1932

THE POLITICS OF NORMALCY

Harding’s Fiscal PolicyHarding was committed

to the free enterprise system Characterized by private

ownership of property, including land & resources

Relies on competition for profits & the forces of supply & demand to determine what goods & services should be produced & at what price

A REPUBLICAN ERA BEGINS

The Postwar Recession EndsHarding worked with Congress to cut taxes

and control spending Repealed taxes meant to fund WWI Reduced spending by $1 billion Used the surplus to pay down the national debt

Harding’s policies brought renewed prosperity to the US Prices plunged, allowing people to afford more Unemployment dropped from 12% (1920) to 2% (1923)

A REPUBLICAN ERA BEGINS

The Teapot Dome Scandal

Harding’s cabinet, the “Ohio Gang,” brought scandal to the White House Harding gave Albert Fall

control over national oil reserves

Fall leased those reserves to 2 companies that had paid him $360,000 in bribes

Fall resigned when the scandal went public

Harding stood by Fall until own death in 1923

A REPUBLICAN ERA BEGINS

Coolidge Promotes Business

As president, Coolidge worked to cut taxes & control spending Pushed for reductions in

corporate, income, & inheritance taxes

Cut the White House budget

Under Coolidge, the nation continued to prosper

A REPUBLICAN ERA BEGINS

Hoover Promises to End Poverty

Like Harding & Coolidge, Hoover believed in promoting business Wanted industry leaders to

work to together to improve economic effi ciency

Hoped that as businesses flourished, poverty would disappear

A REPUBLICAN ERA BEGINS

The US Economy Booms

Under the economic policies of Republican presidents, the postwar recession faded away Productivity increased

dramatically Unemployment dropped Wages rose to double

what they had been before the war

THE REPUBLICAN BOOM YEARS

The Age of Mass Production

The automobile industry led this new age of productivity By 1929, at least half of

all American families owned a car

Made possible by Henry Ford’s moving assembly line which allowed him to increase wages & cut prices

THE REPUBLICAN BOOM YEARS

New Industries AriseThe growth of the

automobile industry fueled new industries as well The steel, rubber, & oil

industries expanded Highway construction

boomed Restaurants & hotels

sprang up along roads Service industries, such

as gas stations & repair shops, were created

THE REPUBLICAN BOOM YEARS

Businesses Get Bigger

During the 1920s, businesses grew due to a wave of consolidation Harding, Coolidge, &

Hoover ignored anti-trust laws

Allowed businesses to merge

Led to the rise of the Big 3 automakers in the US

Created chain stores in the grocery industry, etc.

THE REPUBLICAN BOOM YEARS

Stock Investment GrowsDuring the 1920s, stock

ownership spread to the middle class The Dow Jones Industrial

Average doubled between May 1928 & September 1929

THE REPUBLICAN BOOM YEARS