Consumerism:
Consumerism is the mass purchase of products by American consumers. The 1920s was a period of rapid increase in consumerism due to the Laissez Faire philosophy. The Laissez Faire philosophy, implemented by Presidents Harding, Coolidge, and Hoover, allowed lenience for businesses. In response, monopolies and trusts began to thrive in the absence of restrictions upon their business. New, revolutionary products, such as "automobiles, washing machines, sewing machines, and radios…were being mass produced for millions of Americans to purchase" (Textbook). Americans were not concerned about debt due to false prosperity and installment plans.
False Prosperity:
False prosperity was the national belief that America's economy was thriving, when in reality, it was not. With businesses booming and the entire population purchasing unprecedented amounts of products, America seemed to be prospering. A contributing factor to the false prosperity was installment plans, a financial tool similar to modern day credit cards. Installment plans encouraged the "buy now, pay later" trend which Americans had eagerly adopted. These plans masked the reality that the American economy was in a terrible state. In fact, "80% of Americans during the 1920s had no savings at all - they were living paycheck-to-paycheck" (Textbook). Americans seemed to be prospering financially on the surface, but they were setting themselves up for an economic collapse.
This political cartoon depicts the American citizen's naivety at the terrible state of the economy. Wall Street depleted the savings of this American, leaving him with nearly nothing, and then Wall Street itself collapsed. The cartoon satarizes the Americans' desperate hope that they are still financially sound when it is clear that they are broke.
Income Gap:
The income gap was the disproportionate distribution of the nation's wealth among the classes of Americans. America seemed to be thriving due to the wealthy citizens', who made up 1% of the population, income increase of 75%. However, the harsh reality was that "the other 99% of Americans saw their income increase by only 9%" (Textbook). This gap in the income of Americans disrupted the stability of the economy, which led to the inception of the Great Depression.