Introduction
The United States has undergone tremendous economic changes seventy years after World War II. More specifically, President Eisenhower played a critical role in ensuring Americans experienced new levels of prosperity compared to other parts of the world. He put measures such as low taxes and public spending in place, which saw the economy grow by 37 percent (Trowbridge, 2012, p. 180). The Unemployment rate remained below 4.5 percent during the 1950s (VanHeuvelen & Copas, 2019, P. 77). By 1960, as explicated by Trowbridge (2012), most American families had televisions in their homes and other luxury items such as televisions and cars. However, as years went on, the country witnessed tremendous economic changes shaped by recessions, inequality, and manufacturing, which ultimately affected Americans’ lives and shaped their reactions to politics.
The U.S. Economy from the 1950s to Early 2000
Recessions
The United States witnessed about seven recessions from 1950 to 2000. The first recession occurred in 1953 and lasted for about ten months due to the Korean War (McArthur & Reeves, 2019). As explicated in chapter 9 of the book, the war would have devastating effects on the U.S. and its foreign policy in future decades (Trowbridge, 2012). It negatively impacted the country’s economic growth and unemployment rate – in 1953, GDP was reduced by 2.2 and 5.9 percent in the third and fourth quarters, respectively (McArthur & Reeves, 2019, P. 1005). The second recession, which took place from 1957 to 58, resulted from the federal contractionary monetary policy. As explicated by McArthur and Reeve (2019), this policy saw the GDP fall by 4.1 percent in the fourth quarter of 1957 (p. 1009). President Eisenhower helped end the short recession by improving government spending on highway spending.
The third recession occurred during the 1960 general election involving Nixon and Kennedy. The GDP declined by 2.4 percent, with the unemployment rate reaching 7 percent (McArthur & Reeve, 2019, p. 1007). The economists described this recession as a “rolling adjustment” in different industries, such as automobiles. As explicated further by Trowbridge (2012), Kennedy’s campaigns focused on national security issues. The fourth recession of 1969-1970 was instigated by President Nixon’s decision to de-escalate the Vietnam War. Though relatively mild, the recession saw “unemployment increases to 6.2 percent with the economy contracting by 1.9 percent in the fourth quarter of 1969” (Gowa, 2019, p. 123). Another major recession occurred from 1973 to 1975 due to the OPEC oil embargo, which affected oil prices. This, combined with actions taken by President Nixon, resulted in five quarters of negative GDP growth (McArthur & Reeve, 2019). Other recessions that shaped the U.S. economy occurred from 1980-82 and 1990-92 (McArthur & Reeve, 2019). The former saw the Fed raise interest rates to combat inflation, while the savings and loan crisis caused the latter.
Measures of Inequality
The two most significant inequality measures from 1950 to the 2000s relate to a New Deal and marginal tax rates. For instance, the New Deal played a critical role in paving the way for the increase in union membership. The country witnessed a significant rise in labor productivity and median compensation in the three decades after World War II up to the 1970s. However, the following years were characterized by “slow growth, high unemployment, and high inflation” (Gowa, 2019, p. 140). Although several policies were adopted that initiated a return to growth, the primary beneficiaries were those at the top. In addition, the top marginal tax rates were enacted to divert more resources and money toward private investment. By 1978, labor membership had increased to 23.9 percent – it later fell to 11.3 percent in 2011 (Gowa, 2019, p. 140). The top marginal fluctuated between 28-39 percent from 1980 to 2010 (Gowa, 2019, p. 142). Overall, these fluctuations in union membership and marginal tax rates explain why income inequality remains a significant issue in the U.S.
It is imperative to note that an increase in the civil rights movement characterized the late 1960s. As explicated in chapter 11 of the book, many Americans supported creating more economic opportunities for African Americans and other minorities (Trowbridge, 2012). The liberal groups had escalated in the country throughout the 1960s (Trowbridge, 2012). However, in the early 1970s, white supremacy started shaping the country’s economy as many “whites feared that the rising condition of minorities might threaten their own tenuous status” (Gowa, 2019, p. 144). They adopted measures that supported their interpretations of rights consciousness.
The Strength of Manufacturing
Manufacturing played a critical role in shaping the economy of the country from the 1950s to the early 2000s. More specifically, the strength of manufacturing was witnessed from the 1950s through to the 1970s. There was a steady rise in the number of jobs, with the highest number (19.5 million jobs) recorded in 1979 (Charles et al., 2019, p. 307). Similarly, a high percentage of Americans “enjoyed a wage bubble of previously unknown proportions” (Charles et al., 2019, p. 307). However, there was a steady decline in job opportunities starting from 1979. By 2011, only 11.75 million Americans were working in the manufacturing sector (Charles, p. 305). This is a clear indication that the manufacturing sector has helped a lot in shaping the country’s economic conditions.
Impact of Economic Conditions on the Lives of Americans
The economic conditions, characterized by recessions, manufacturing, and economic inequalities, had a significant impact on the lives of Americans. For instance, by the late 1960s, as described in chapter 12, most Americans had at least one television (Trowbridge, 2012). This was possible because “the money income of Americans drastically increased by 50 percent” (Trowbridge, 2012, p. 123). The economic conditions also shaped their reactions to politics instigated by the conservative era of the 1980s. For example, the era led to a political climate where a specific group of women identified themselves as feminists. The feminist movement, as explicated further in the chapter, contributed a lot to the elimination of injustices associated with voting – many Americans, including women, had started participating in politics. This period (1980) also saw a high number of black Americans join the middle –class – this was made possible through the civil rights movement that dominated the era. Lastly, the percentage of women in Congress rose from 5 percent in 1990 to 15 percent in 2000 (Trowbridge, 2012, p. 208). Ideally, the economic conditions of the period had an impact on the lives of many Americans.
Conclusion
The U.S. has undergone tremendous economic changes seventy years after World War II. More specifically, the country’s economic conditions during this period were shaped by recessions, manufacturing, and income inequality. For example, the recession caused by the Korean War reduced the GDP in 1953 by 2.2 and 5.9 percent in the third and fourth quarters, respectively. In addition, the fluctuations in union membership and marginal tax rates explain why income inequality emerged as a significant issue within this period. As further discussed above, the economic conditions had a significant impact on the lives of Americans. For instance, in the 1960s, most Americans had at least one television.
References
Charles, K. K., Hurst, E., & Schwartz, M. (2019). The transformation of manufacturing and the decline in U.S. employment. NBER Macroeconomics Annual, 33, 307-333
Gowa, J. (2019). Closing the gold window: Domestic politics and the end of Bretton Woods. Cornell University Press, Ithaca, New York
McArthur, D., & Reeves, A. (2019). The rhetoric of recessions: How British newspapers talk about the poor when unemployment rises, 1896–2000. Sociology, 53(6), 1005-1025.
Trowbridge, D. J. (2012). A history of the United States Vol. 2. Flat World Knowledge, Inc., Boston, Massachusetts.
VanHeuvelen, T., & Copas, K. (2019).The geography of polarization, 1950 to 2015. RSF: The Russell Sage Foundation Journal of the Social Sciences, 5(4), 77.