by Adja Roznic

Created on: January 15, 2009

The Roaring Twenties were a time in artistic, social, and economic ideas were different than those of the 1910s. This change caused the 1920s to be a highly successful one for the most part.
A component of this success was the economy. The economy of the 1920s was a large contributing factor of why it is known as the "Roaring Twenties". The reason why the economy was great was because of the businesses that flourished with governmental support. This led to an increase in consumerism, economic development, and an increase in employment. However, the great economy of the 20s ended on January 29th, 1929 (Crash).

This caused the worst economic period in history.

In the 1920s there was a very large increase in the acquisition of goods by consumers. Mass production and large retail stores enabled lower prices, so therefore people made more purchases. Credit was being used more than ever in the twenties by consumers and businesses alike.
This allowed people to make more extravagant purchases with the options to pay later. People had more money and were able to spend some on entertainment.
Therefore forms of amusement such as movies saw an increase in popularity. The increase of consumerism is representative of the economic boom that existed between 1921 and 1928. (Consumerism)

For the better part of the 1920s, big businesses did quite well and saw increases in nearly every performance indicator. For example, industrial production increased 70 percent, the output per factory man hour increased 75 percent, and corporate profits increased by about two-thirds (Statistical Portrait). Because businesses were doing so well, their success was being passed on to their employees. Workers' incomes increased by 11 percent and the total earnings of those getting wages increase by nearly a fourth. The Republican government of the twenties favored large businesses, which bestowed them with great opportunities to prosper. However, the agricultural sector of the economy did not fare nearly as well (Economic Development). Although the economy appeared to have flourished throughout the decade, there were actually many well concealed flaws.

These flaws would lead to the worst economic downfall of all time. On Black Tuesday, January 29th, 1929, investor panic, related to the slipping stock market of the few days before that, caused the stock market to crash (Crash). The investments that had allowed the businesses to grow immediately came to a halt. The decade of economic development had ended. Some of the causes of the historic crash were: uneven distribution of wealth, the overuse of credit by consumers and businesses alike, governmental business regulations, and a weak agricultural sector.

The economic flaws of today are frighteningly reminiscent of those of the 1920s. Since the beginning of the current decade, the movement of the stock market is similar to that of the twenties. For the first couple of years of both decades the market ended down. Then, for the next several years the economy bubbled and became highly successful.
Now, as in the last years of the 1920s, the economy is in shambles. This recession, like the Great Depression, is caused by credit abuse, failed governmental regulation, and a weak agricultural economy (Crash).

Throughout the majority of the 1920s the economy flourished due to industrial and corporate success. Americans had increased incomes and took pleasure in having an increased standard of living. However, the economy had its flaws, which led to the worst economic period in history.
Today, the economy is in shambles and is becoming reminiscent of the period leading into the Great Depression.

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