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Summary The Roaring Twenties -- Coolidge oversaw the growth of the economy; while Hoover, Roosevelt both inhibited free enterprise: as souvenirs of massive government they left Depression Years. Chapter The post-war Harding term was called "Return to Normalcy," but Teapot Dome instead recalls a kickback policy (was this normality?). Then silent Calvin Coolidge said "the business of America is business" - he'd embed a sense of laissez-faire in government. The end result was steady economic growth. The country would exult in new consumption: cars and radio and telephone. And inequality was down - the middle-class had grown as never seen before. But overseas our growing might was cause for apprehension (though our efforts to invite cooperation were in evidence when banker Dawes helped bail the German Mark). Yet other 'helpful' acts were cause for critical concern, like policies of arms control (utopian, and giving arms-deprived regimes a goal of newer weapons). And the Kellogg Pact, which outlawed war! Such ill-advised initiatives would serve to underscore big government futility. Yet Hoover would be next. His business intervention would have certainly perplexed a Jeffersonian. He beat Al Smith (in "every pot a chicken"), first among the Democratic juggernaut of city voters. Hoover took the blame for '29, as overlending and the wealth imbalance would combine (so says the myth) to crash the market. Pockets inside-out (the "Hoover hankies") dried the nation's tears until the doubt and damage was removed by FDR. Reality conflicts with that assessment. Government would oversee the failure, as the market served, as always, to reflect productiveness, high wages, and demand. It's incorrect to blame the rich - the middle-class was growing. The supply of money, though, was shrinking, and the Fed would magnify the problem, making money tighter. And the tariff (Smoot and Hawley) meant that higher import fees would constitute a higher cost of doing business, so the companies began to sell their stock. And Hoover, seeking to appease the public with a lower income tax, intensified the problem (lower taxes for the wealthy to provide a stimulus was not to be). The system crashed, devoid of capital. Some cities had three-quarters unemployed. |