Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
In 1929, 60% of all families had annual incomes of $2,000 or less; 42% had annual incomes of less than $1,500. More efficient machines had made it possible for the productivity of industrial workers to increase by 32% during the 1920s, but their wages had increased only 10%. Profits from the industrial corporations grew 62% and went largely to the wealthiest 5%.
Year Richest 5% Richest 1% 1923 22.9 12.3 1929 26.1 14.5 Until 1925, increases in installment buying by the expanding number of white-collar workers made it possible to consume the goods pouring off the assembly lines. The use of automobiles went from 9,000,000 to 20,000,000 between 1920 and 1925, (122%)but only to 27,000,000 by 1930 (35%). By 1929, automobiles absorbed 20% of the steel, 75% of the glass, and 80% of the rubber produced in the US. The oil industry and the many gasoline filling stations, repair garages, auto dealers, roadside restaurants, and places to spend the night depended upon the auto. The auto was so important that the national government adopted a highway marking system to facilitate driving and national, state, and local governments began road building programs. Much of the country's cement production went to highway building. The slump in automobile sales was paralleled by the decline in the construction of new housing, causing unemployment in the building trades. Fewer suburban houses meant fewer markets for appliances, wall coverings, and other activities related to home building.
The economy was in trouble but people, dazzled by a surging stock market, ignored it. Agriculture was in a depression as farmers sold in a competitive market while having to buy in a protective market because US business subverted free enterprise by having the government tax foreign manufactured goods high enough to guarantee sales to US producers. Improvements in farm technology, which allowed farmers to produce more, only made the situation worse for demand was inelastic. The consumer economy was slowing as incomes skewed to the rich. In 1929, the richest 10% of families received 39% of disposal personal income while the bottom 10% only got 2%.
People seemed to be forgetting that capitalism needs to expand, that demand for housing, clothes, automobiles, stoves, and many other consumer goods generates demand in other sectors of the economy. But mass production necessitates mass consumption. Mass consumption necessitates an income distribution that allows consumers to buy. Without the appropriate income distribution, warehouses will burst at their seams and production lines will clog. Ethnic discrimination usually meant lower pay for the affected groups. The coal industry was in economic trouble as US consumers and businesses switched more and more to petroleum or hydroelectric sources of power. The introduction of synthetic fibers, such as nylon, dealt body blows to the cotton and wool textile industries. The wealthy bought luxuries but could not buy enough to sustain the consumer economy.
Many of the wealthy, as well as others, joined the speculative stock market sending stock prices to greater and greater without regard to company performance; In October, 1929, the bubble burst. The crash meant the tremendous loss of capital as prices declined $74 billion from 1929 to 1932 and the repatriation of much of US investment abroad. The Germany economy collapsed followed by the British and french economies. Germany could not pay the reparations it owed to the victors of WWI or make debt payments to US lenders, setting off a chain reaction. The world entered an economic depression.
President Herbert Hoover did not know how to meet this crisis. His government began buying farm surpluses in order to prop up prices but it did not buy enough to make a difference. The Farm Board loaned money to farmers to establish cooperatives (a socialist measure) but the millions of farmers scattered across millions of miles had difficulty in cooperating. Farm income went from $8 billion in 1929 to $3 billion in 1993, a decline of 62.5%.
Republican wisdom said that high tariffs were good for the economy and, besides, in a time of world crisis countries tend to become very nationalistic, so the Congress passed, with Hoover's acquiescence, the very high Hawley-Smoot Tariff in 1930. Raising the tariff made things worse because it meant that foreigners could sell less in the US and thus earn fewer US dollars with which to buy US goods or make payments on debts owed to US citizens. Exports fell 50%.
As historians Peter N. Carroll and David W. Noble note, Hoover feared that the collapse of the large corporations would bring down the entire US capitalist system. After all, one percent of the banks held 50% of banking assets. Three corporations—Ford, Chrysler, General Motors—manufactured 85% of the automobiles sold in the US. Chain stores dominated retail sales and their difficulties had national repercussions.
Business and industry met the crisis as they had always done—they cut production, lowered wages, reduced working hours, and fired workers. Unemployment rose from 1.5 million in 1929 to 13 million in 1933, a figure which represented 25% of the labor force. Even such a high percentage hid the dimensions of the problem because it did not what percentage had been forced the part-time work. Industrial wages fell from425 a week to $17 a week, a decline of 32%. By 1932, sawmill workers were only earning five to ten cents an hour; Tennessee female mill workers earned $2.39 for 50 hours work; and Connecticut women got between 60 cents to a dollar for a 55 hour week. To help the situation, the Hoover administration sept close to a billion dollars in public works programs but he would not go further. Nor would he argue for direct relief to the unemployed and starving because he feared that doing so would corrupt them. Although he had administered relief progress in Europe after the First World War, he saw that as only an emergency measure caused by war. He believed that doing a similar thing in the the US would become a permanent practice. To many, he was callous. As people lost their homes and created shanty towns, they derisively called the "Hoovervilles." Hoover argued that private charities and state and local governments should be the institutions to provide relief. But they were suffering as well and could not deal with a problem of this magnitude.
Hoover and the Republicans saw aid to corporations as being different. Whereas they believed that helping the individual citizen weather the Depression would corrupt him or her, aiding corporations and other business was different. To many, it appeared that the Republicans were only interested in the rich. The newly-created Reconstruction Finance Corporation aided only the large corporations.
Hoover broke precedent because the national government assumed some responsibility for what happens during an economic depression but he was not willing to go far enough. He believed that the depression was part of the normal business cycle and had been caused by international factors and not US ones. to him, "prosperity was just around the corner." The best thing for the country to do would be to wait the crisis out.
The current president's father was criticized for not having what he termed "the vision thing." The son's problem is just the opposite. He has such a Vision that it blinds his vision. People such as Hoover and the younger Bush cannot see the trees for the forest. Their unwavering adherence to their ideal of the ways things ought to be prevents them from seeing the way things are.
Emerson's famous maxim about consistency is often repeated without its key term. The sage of Concord wrote not that consistency itself is foolish, but that "a foolish consistency is the hobgoblin of little minds, adored by little statesmen . . . ."
What site did you cut and paste this from? I'd like to read the rest.
Bush has little to do with the economy. It goes up; it goes down. He's not even supposed to intervene with the Fed.
If you want to blame the government though for a bubble bursting, look to your Congressmen. They have control over the budget.
Michigan's probelems? The people are the problem. Not automakers leaving.
Wow, do I ever disagree with you. The state has very little budget to work with due to so many of us being out of work and so many businesses leaving or dying. The automakers are still right here, and I'm almost sure I saw Billy Ford on a streetcorner yesterday wearing a "WILL WORK FOR FOOD" sign.
And if not for Bush's cronyism, MI would have a lot more defense contracts to get us through the war.
When the rest of the country was doing fine MI was in a one state recession. Now that the rest of the country is in a recession, is MI in a one state depression?
Michigan does not have anything to take the place of the auto industry. Snow is just not enough to keep it out of the toilet.
Talk of ill planed theme parks is not going to bring the state out of lost auto jobs. How many are moving to other parts of the country?
This is getting harder to do as things slow across the nation.
And we still have 7 months of bushie to screw things up worse. This guy could screw up a wet dream.
Michigan may not have anything to replace the auto industry, but by the looks of this article, Alabama is real happy to be on the short list to get yet another auto assembly plant.
Alabama employs 134,000 auto workers with a payroll of $5.2 billion annually and they are in the running to get another plant. Instead of looking to the federal government as the source of our ills, why do we not look inside? Why are jobs leaving Michigan in an industry where we should be in the lead? The article points out it is the cost disadvantages and labor pool of Michigan.
So instead of leading trips overseas to try and land yet unknown green jobs in yet unknown green industries, why don't we roll up our sleeves and show the other states that we can change and we can compete in an industry that we built?
No, Michigan is not in a "one" state recession, we have the unfortunate situation of having a leaders that cling to industry which will not be in America in the coming years. Statistics, however can be misleading when applied to unemployment. Media will always up play the "urgency" of a situation, and often inflates numbers....not to say that there isn't a problem, because there is. The fact is...people are leaving, and loosing interest in the state. Investors see this, marketing firms see this, and it is something that isn't a surprise. The constant ho hum that resonates from the Michigan public will do nothing either. If one thinks that Michigan is the only state that has residents who cannot afford gasoline or their homes, your quite sheltered. Michigan has always had higher wages than many states, the downside is that once again...people are relocating causing a different set of issues beyond the economic downfall, which are now interrelated. The mindset of the state government is the driving force behind the relocating families that will not stay to find out what happens in 5 years. No, it is not just Michigan, we simply (or not simply) have a huge problem that is the direct result of our negative image, that further drives away chances of recovery. It is a proverbial situation that may only be corrected by the return of millions of residents that have left.
Wow, do I ever disagree with you. The state has very little budget to work with due to so many of us being out of work and so many businesses leaving or dying. The automakers are still right here, and I'm almost sure I saw Billy Ford on a streetcorner yesterday wearing a "WILL WORK FOR FOOD" sign.
And if not for Bush's cronyism, MI would have a lot more defense contracts to get us through the war.
So you're saying that the reason for the MI depression is that others haven't fulfilled some imaginary obligation to MI? It's not because of a bad labor situation for potential employers or the only government in the history of America to raise taxes during a recession?
So you're saying that the reason for the MI depression is that others haven't fulfilled some imaginary obligation to MI? It's not because of a bad labor situation for potential employers or the only government in the history of America to raise taxes during a recession?
Someone said it started before Cantholdem. Yes indeed BUT, she saw it just as everyone else did. She had all these "ideas" and plans......WHERE ? All she did was raise taxes that affect the middle class mostly.
SHE has cost Michigan. It isn't teh Psycology of teh people.that's the problem. It's always managements' fault, always. So she gets a great idea..... Go out of the country to attempt to bring businesses to Mich. GREAT. What kind? Automotive. JUST what we need. She doesn't have brains enough to draw Co's from this country? No. If she didn't have emergency surgery yesterday she'd be in Indonisia trying a failed plan. Since I moved back here 6 yrs ago, I have referred to detroit as Detoilet and have stated that Michigan will be the 1st 3rd world state. It isn't the unions' fault though they do share some of the blame, it's the BIG 3's and Gov't. It sure isn't the mentality of the people (that are still stuck here) trying to survive. I've been unemployed for 2 years but now I'm "overqualified" or too old. I'm overqualified b/c there isn't anything left in Michigan except service jobs.
Unfortunatelly I'm stuck living in this state for 1-2 years otherwise I'd be gone. The 1st time I moved back here my dad said DON'T. I said why ? His reply, NO JOBS. That was in '87 too. Again, it isn't the mentality of the poor people.
Someone said it started before Cantholdem. Yes indeed BUT, she saw it just as everyone else did. She had all these "ideas" and plans......WHERE ? All she did was raise taxes that affect the middle class mostly.
SHE has cost Michigan. It isn't teh Psycology of teh people.that's the problem. It's always managements' fault, always. So she gets a great idea..... Go out of the country to attempt to bring businesses to Mich. GREAT. What kind? Automotive. JUST what we need. She doesn't have brains enough to draw Co's from this country? No. If she didn't have emergency surgery yesterday she'd be in Indonisia trying a failed plan. Since I moved back here 6 yrs ago, I have referred to detroit as Detoilet and have stated that Michigan will be the 1st 3rd world state. It isn't the unions' fault though they do share some of the blame, it's the BIG 3's and Gov't. It sure isn't the mentality of the people (that are still stuck here) trying to survive. I've been unemployed for 2 years but now I'm "overqualified" or too old. I'm overqualified b/c there isn't anything left in Michigan except service jobs.
Unfortunatelly I'm stuck living in this state for 1-2 years otherwise I'd be gone. The 1st time I moved back here my dad said DON'T. I said why ? His reply, NO JOBS. That was in '87 too. Again, it isn't the mentality of the poor people.
What makes you think the governor can fix your life? What has Granholm or anyone else done to you to prevent you from filling a need immediately around you to make a living?
So you're saying that the reason for the MI depression is that others haven't fulfilled some imaginary obligation to MI? It's not because of a bad labor situation for potential employers or the only government in the history of America to raise taxes during a recession?
No, I'm not saying that. I'm saying that everyone blames Granholm for causing everything when she is almost the only one trying to correct the problem. The Big Three have had GENERATIONS to diversify and strengthen the state's economy and their own fortunes as well. They could be making sofas and pasta now as well as rolling iron. They could have a cosmetics empire along with the automotive one. But they're just sitting on their hands.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Michigan
Someone said it started before Cantholdem. Yes indeed BUT, she saw it just as everyone else did. She had all these "ideas" and plans......WHERE ? All she did was raise taxes that affect the middle class mostly.
that's the problem. It's always managements' fault, always. So she gets a great idea..... Go out of the country to attempt to bring businesses to Mich. GREAT.
JUST what we need. She doesn't have brains enough to draw Co's from this country? No. If she didn't have emergency surgery yesterday she'd be in Indonisia trying a failed plan. Since I moved back here 6 yrs ago, I have referred to detroit as Detoilet and have stated that Michigan will be the 1st 3rd world state. It isn't the unions' fault though they do share some of the blame, it's the BIG 3's and Gov't. It sure isn't the mentality of the people (that are still stuck here) trying to survive. I've been unemployed for 2 years but now I'm "overqualified" or too old. I'm overqualified b/c there isn't anything left in Michigan except service jobs.
