The Collapse of the American Economy in the 1920s
The 1920s period in the American economy seemed like an era of growth and prosperity, but a collapse was witnessed in 1929. The underlying factors that led to the collapse of the economy include ineffective and flawed banking system where the deposits were not guaranteed which contributed to the panic and "runs" to withdraw money which eventually led to the collapse of the financial system. There were high levels of income and wealth inequality as mergers and consolidations meant that the bulk of American economy depended on a small number of companies which increased the effects of the stock market crash once the companies went bankrupt. The monetary policy is another factor that led to the collapse of the economy as the boom in stock prices had prompted the federal government to hike the interest rates on loan borrowers which contracted the money supply in the economy. Consequently, incomes and output in the economy decreased leading to the contraction and depression in the economy.
The Parrish speech and the Nebraska Supreme Court decision in the Meyer v. Nebraska reveals the deep divisions in the American society of the 1920s. Parrish advocates for more stringent measures to limit the immigration process of people from Europe citing that such immigrants were the cause of negative influences and erosion of the American ideals. The Nebraska Supreme Court decision also reveals the divisions between the natives and immigrants as the teaching and learning of any foreign language other than English was prohibited. The majority decision in the case cited the harmful effects that would result if immigrants were allowed to educate their children in their mother tongues as it would threaten the safety of the natives.
Before the collapse of 1929 and the Great Depression, the definition of American Freedom involved capitalistic means and actions in pursuit of wealth with little government action which resulted in unchecked greed. The New Deals that Franklin D. Roosevelt adopted to spur the American economy from the depression recast the definition of American freedom. The new understanding of freedom involved the pursuit of liberty and prosperity with an aspect of social responsibility and security. The increased involvement of the government in social activities such as the provision of welfare to the disabled and elderly. Additionally, the New Deals led to an increased government contribution through regulation such as the establishment of the Financial Deposit Insurance Corporation which checked the operations of banks and lenders to reduce the rate of greed and induce social responsibility of such institutions to the depositors increasing their economic security.
The StudySpace author videos present different themes as discussed in chapter 20 and 21. One of the themes is the adoption of economic security as an integral part of the American Freedom. Another theme is the economic development role of the New Deals in the remaking of the American West through infrastructural and economic development programs such as highways, irrigation schemes, and dams for electric power production such as the Grand Coulee Dam. The other theme focuses on the beneficiaries of the New Deal where African Americans and other non-white groups were discriminated such as the exclusion of domestic and agricultural workers from social security and minimum wage programs. African Americans and other non-white population were the main groups in the identified economic areas. Another theme presented is that the New Deals established the federal government as a permanent administration state with the establishment of different authorities to regulate diverse aspects of the economy. The last theme includes the protection of civil liberties which became the epitome in the definition of the American freedom in comparison with other regimes such as the Nazis. From the above themes, I consider the development of the government into a permanent authority state to regulate the economy and the commitment to civil liberties as the core of American freedom as the most important.