20th Century US Political Economy Cycles
See 20th Century US Economic History 1900-2017 
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Key Events

Panic of


Recession 1920 ended 20 years of successful economic expansion with constants social turmoil.

1) Rail Road  speculation caused led to  Reading Railroad failure and withdrawal of European investment led to a stock/banking collapse. 2) Repeal the Sherman Silver Purchase Act to end the easy money policy which really hurt agriculture. 3) Bank runs followed as foreign investors wanted species. Result was political instability and the height of the U.S. populist movement with its Free Silver "cross of gold" movement.
Panic of 1907-08  Unemployment stayed low as the US economy was dominated by Agriculture. Since the Jackson era banks had been decentralized and during periods of boom, banks able to lend unchecked. A run on Knickerbocker Trust deposits on October 22, 1907, set events in motion that would lead to a severe monetary contraction. The fallout from the panic led to the Federal Reserve System.

WW 1 Prosparity

Measles kills 12,000 children. Progressive Era Continued as US slowly begins to take on social responsibilities like helping eliminate the  hookworm parasite which made tired many southern workers and students. US business made a substantial profit .
The Spanish Flu epidemic of 1918 killed 500,000 would blunt post war demand. 1) After the war troops returned to few jobs, tight money to hinder 1919 inflation, and low agricultural demand from Europe  caused a short severe recession with severe deflation but Real GDP only lost between 2.7% and 7%. 2) Labor conflict with many strikes caused the First Red Scare. Many blame the Newly formed Federal Reserve and Income Tax depicted rise of a nation.
Liberal activities by unions, suffragettes and socialism  brought government action, some good like 19th Amendment
Depression 1929-39

Dust Bow Bonus Army Killings   
Scottsboro Boy Racial Injustice
Memorial Day Massacre

1) A speculative financial boom financed with borrowed money resulted in a Worldwide stock market and banking crash. 2) A brief 1930 recovery was swatted by the Smoot–Hawley Tariff Act. Then there was the Revenue Act of 1932 which dramatically increased federal taxes.

WW 2 Economic Boom

Post WW2 layoffs caused 400,000 mine workers to strike.
Other industries followed. Many associated unions Communism. 
Cold War was formalized with 1947 Truman Doctrine  to contain Communism.
Much military spending with expanding economy followed.
U.S. Marshall Plan loaned $12 billion to rebuild Europe.
Loans were spent with US contractors  expanding economy.
Korean War started by China backed North Korea added fuel to Senator Joe McCarthy's communist witch hunts initiated a Second Red Scare
Russia quelled revolutions in buffer countries Hungary and Polish to insure the 22,000,000 Soviet citizens killed by Hitler did not die in vain.
A  US/UK orchestrated 1953 Iranian Coup
overthrew Iran's democratically government to maintain British oil interests established in 1901.
Suez 1957 Crisis was an attempt by Colonialists Britain and France to keep control  the Suez Cannel. It ended when Ike, threatened the pound.
Hot Wars, Cold War, and Race Relations during a 30 years of social turmoil.

1973-74 Recession


Early 1980's Recession

Social Revolution, Great Society and Abortion change dynamics of factor allocation.

Vietnam war caused federal debt increased inflation.
Foreigners not wanting the cheapened dollars forced the US off its partial gold standard.

OPEC limited oil supplies which increased domestic prices.

Business/unions increased price/wage demands causing inflationary psychology

WW 2 boom ended with the 1973 collapse of the Bretton Woods monetary system ended .

The Iranian Revolution induced the 1979 energy crisis added to inflationary pressures

Monetary policy by Carter appointee Paul Volker took on inflation with a recession.

A second 1982 recession resulted in some feeling the FED had tighten too much.

Medicare and Social Security were not tied to inflation until 1981 so the elderly were hurt most by stagflation.

Great Moderation
Kevin Phillips predicted and end to Reagan era upper bracket excess in his 1990 book The Politics of Rich and Poor. In America: What went Wrong,  Barlett and Steele deftly expose the shifting tax burdens, deregulation, foreign investment, bankruptcy laws, and other changes that have reeked havoc on the middle class.

2001-2002 Dotcom Recession
seemed worse because time were so good, then
9/11 made many feel unsafe.

Voters ignoring debt by accepting Two Bush Tax Cuts

Bush adds Prescription benefits to Medicare to help baby boomers

The 1990s were the longest period of growth in American history.
The collapse of the speculative dot-com bubble, a fall in business outlays and investments,
and the September 11th attacks,[47] brought the decade of growth to an end

Great Recession 2007-09 Despite these major shocks the recession was brief/shallow.

1) Speculative real estate practices and home loans led to the collapse of the United States housing bubble.

2) Falling housing-related assets contributed to a global financial crisis, even as oil and food prices soared.

3) Some US large financial institutions: Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, City Bank and AIG crashed Prompt Government Action avoided a pending auto industry crisis, mitigated the financial crisis, began the recovery but have been unable to return measured economic growth.




Is Tech Cycle reinforcing a Business Cycle and a Political Economy Cycle. This may be Friedman's Latest book

Cycle Date Technology Peaked, rapid growth ended  Problem


1850 Steam Civil War    
1010's electricity WW 1 Progressives  
1950's automobiles Cold War Korea/Civil Rights Red Scare  
2000.s Digital, Globalization Great Recession, Nationalism