The economy of the 1920's, also known as the Roaring Twenties, soared like never before. It was a time in history when the American people were big consumers while working hard and trying to earn an income. With this income, Americans were able to buy the numerous technological advanced items that that were being invented like radios, home appliances, and automobiles. This is much like the world today. With the increase in technology as well as the advanced income of many Americans, Americans are able to buy the many new inventions that are in the world today just like they did during the Roaring Twenties.
Back in the 1920's, President Calvin Coolidge who was a Republican served from 1923 until 1929. President Coolidge believed in the same type of policies as the previous president, Woodrow Wilson (Adams, Lecture: The New Era). They both believed that the government should not interfere with polices towards the United States economy and business. The government did not interfere with business regulation like they did in the Progressive Era. This is why this era was also dubbed, the New Era.
During this New Era, since there was less government involvement in business regulation, free enterprise surged. Also production increased from the many types of new technologies that were forthcoming. Radios were among the most desired item of communication (Schaller, Schulzinger, et al. 756). This allowed many Americans, to get information from what was happening through out the country. The first commercial radio special to air was the Warren Harding and James Cox presidential election on November 2, 1920. Within two years there were over 500 radio stations and three million homes with a radio. People from all over the world could now get much needed information more easily than ever before.
Other technological advances that came out during the 1920's where the home appliances that made life easier for the common housewife. Refrigerators and washing machines became appliances that every family had to have. These new products promised the housewife that she would have more time if she purchased these new electrical appliances. These new products were mostly enjoyed by the middle and upper classes of America. If a family's income was too small for these big purchase items, then all one had to do was purchase the product on credit installments (Adams, Lecture: The New Era). This was like buying on a credit card in today's world. One could pay each month until the payments were paid off.
One of the most technological advances of the century was the automobile. This changed the way the American people lived and worked (Adams, Lecture: The New Era). This was the largest manufacturing industry in the 1920's. These automobile manufactures employed hundreds of thousands of employees. The automobile industry also brought on other industries. Since cars needed gas to run, gas stations were invented. Also fast food became a popular food choice since people now had cars and they could pick up a meal fast by going through the drive-thru. Also motels became quite popular. The automobile allowed for families to travel. They would need a place to stay during these travels which is why many motels popped up here and there. According to the American Horizons textbook, vehicle registration went from 3 million in the early 1920's to 8.25 million in 1927 (Schaller, Schulzinger, et al. 757). This shows us that the automobile sales were increasing quite rapidly. These automobiles were marketed to the people of different incomes. If an individual could not afford an automobile, then one could buy the automobile on credit. Many people's' incomes were not enough for these big purchase items but with credit installments, one could now own an automobile. The people of this era were more likely to spend than save.
This new standard way of living was very different to the people of this time period. America not only had new electrical goods and automobiles, they also had a variety of other new elaborate things. These new things consisted of: bigger homes, furnaces and oil heaters, telephones, more cosmetics, more food in tin cans, more restaurant eating, more candy and sugar, moving and talking pictures, more comic strips, more cigarettes, more clubs, more magazines and tabloids, more golf, more travel, more education, and more amusement parks (The Twenties 4). There were many other new things as well. Americans had access to all these new items and entertainment, but while there were advantages of having these new things, there were also disadvantages. Some disadvantages of these items were that they were made poorer in quality. Also, homemakers started cooking less, which meant less home cooked meals. All these new items made Americans spend more and save less which was the motto of this decade.
In the world that we are living in today, we find our society very comparable to the society back in the 1920's. People are encouraged by advertisers to buy the latest trends. People are spending more than saving, just like in the 1920's. According to the CNBC news article, Here's How Your Spending Habits Compare to the Typical American, Most Americans do not keep track of their spending habits "(CNBC.com). Surprisingly, one out of three people take the time to keep track of their spending. Much of people's income goes towards housing, transportation, and food. In fact, the average American spends 61.3 percent of their income on these three things. And, when you have all the rest of the bills that Americans need to pay, like healthcare, auto insurance, clothing, entertainment expenses, and so forth, saving can be quite difficult.
Americans in the 1920's had a difficult time saving and an easier time spending. If one could not afford a new innovation of the times then one could just buy it on credit installments. This is exactly what is happening today. According to CNN Money, nearly half of Americans spend their entire paycheck. Overspending is to blame. And what happens when the paycheck runs out? Americans then go to spend on their credit cards.
Furthermore, Americans now have the largest credit card debt in U.S. history with over $1.021 trillion in 2017(marketwatch).
We can see that the consumer buying trends of the 1920's and the consumer buying trends of today are pretty similar. Americans are still buying automobiles, which was a big purchase back in the 1920's as well as today. In fact, it was the most important consumer product of the 1920's (history.com). By 1929, one out of every five Americans had an automobile. It is still an important big purchase in today's world. As many as 8 out of 10 Americans now own a car (npr.org). And how were the people of the Roaring Twenties and people of today buying this big ticket item? People were and still are buying these automobiles on credit. According to Consumer Reports, 84.5 people who bought an automobile or leased an automobile financed it on credit (consumerreports.org).
Other big ticket items such as the household electrical appliances, like refrigerators and washing machines, are now necessities. Instead of a telephone, we now use cellular phones. According to the article: Television in the U.S.: History and Production, in 1928, the first television drama appeared on television. The television was so small only the actor's face could be seen. Now we have televisions that are 110 inches wide. We communicate through a computer by writing an email instead of using snail mail. All the innovations from the Roaring Twenties are now perfected and technologically advanced. With each year passing, these items will become even more perfected and new inventions will come out into the market for us Americans to purchase and spend our entire paycheck on. After we spend our entire paycheck, we will be able to put our purchases on credit. It is the same cycle over and over again. Will American consumerism ever change? Or will we keep buying the latest technological innovation that is being marketed to us. I still believe the motto has not changed from the 1920's. Still the motto is: Americans spend more and save less.
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