Boom Of The U.s. And World Economies

1568 WordsMar 20, 20167 Pages
Boom and Bust in the U.S. and World Economies New business and production methods along with progressive business philosophies allowed manufacturers to boost turnover and to make large profits which they plowed back into new factories and wage rises. Department store and service station chains used massive buying power and operating efficiencies to lower prices while increasing service and choice, helping wages to go further. Henry Ford used his huge buying power to setup discount grocery stores selling cheap groceries for his employees, much to the annoyance of local store owners. Increased incomes, along with the introduction of credit funded a huge increase in consumer spending. Only some of the increased affluence found its way into insurance as a provision for retirement. There was an economic recession in 1921 but it was allowed to run its course without political interference and as a result it was over in 18 months. As the economy picked up, easy credit and speculation created stock market and property bubbles that had devastating effects when they eventually ended. People living in the cities and areas of industry benefited most from the increased prosperity although there were arguments to the contrary. Those living in rural areas did not benefit to the same extent, and this was made worse by widespread drought. This encouraged population movement from rural areas to cities, a trend which has continued down to the present day. In 1926 alone the Department of
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