After the massive Covid-lockdown-fueled economic decline in the first half of 2020, the US saw one of the biggest surges in economic activity in history. US GDP was $21 trillion in 2020 but surged by 10,71% in 2021 and 9,21% in 2022. In 2023 US GDP is expected to be around $26,9 trillion.....up 28%. The combination of pent-up demand and savings, massive stimulus, lower tax rates and super-cheap capital are like kerosine thrown on a fire. The spending frenzy that happened was akin to the OTHER 'Roaring 20's' in the 1900's.....another post-pandemic (Spanish Flu) economic era that represents a period in American history of dramatic social, economic and political change.
For the first time in the 1920's, more Americans lived in cities than on farms. The US’s total wealth more than doubled between 1920 and 1929, and GDP expanded by 40% from 1922 to 1929. Americans became an affluent “consumer culture” in which people nationwide saw the same advertisements, bought the same goods, listened to the same music and did the same dances. But there was also lots of conservative pushback with this racy urban lifestyle, and the decade of Prohibition brought more conflict than celebration....many middle-class Americans saw prohibition was a way to assert some control over the unruly Irish and Italian immigrant masses who crowded the nation’s cities. Then the excesses of the Roaring Twenties came crashing down as the economy tanked in 1929 with a massive market crash that triggered the Great Depression....
* In 1912 around 12% of Americans experienced a new technology.....called electricity. By the mid 1920's 60% did!
* In 1920, not only were women allowed to vote, but they also entered the workforce, introducing a massive new consumer class.
* The first commercial radio station started broadcasting in 1920 and by the late 20's 12 million households had a radio.
* The car was another massive shift.....by the end of the 1920's 20 millions of Americans owned a car.
* Civil Rights was a big issue too, seeking stable employment, better living conditions and political participation.
* Gangs (and corruption) thrived and grew their power, especially in cities.
* The stock market collapse of 1929 was caused mostly by rampant speculation (stocks on margin)....and tightening of credit by the Fed (in August 1929 the discount rate was raised from 5% to 6%), the proliferation of holding companies and investment trusts (which tended to create debt), a multitude of large bank loans that could not be liquidated, and an economic recession that had begun earlier in the summer.
While some of this sounds eerily familiar - although slightly different - it's always a good idea to look to the past to see how patterns have a way of repeating themselves. There is one good thing, though, about today's instant, daily, 24/7 broadcasting of bad news: it fuels awareness and.....fear. Fear often prevents - or at least minimizes - arrogance......which may explain why we are at least all clearly aware of the multiple big issues and risks of the day and seem to be acting faster than in the past to fix them? Hopefully tribal anger and righteousness doesn't get in the way of distracting us to come together to enact real solutions.
