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Unformatted text preview: 1 A Brief Economic History of the United States C hapter 1 M ore than two centuries ago, some Americans believed it was manifest destiny that the 13 states on the eastern seaboard would one day be part of a nation that stretched from the Atlantic to the Pacific. Was it also our manifest destiny to become the worlds economic superpower? CHAPTER OBJECTIVES In this chapter youll learn: How we grew from a primarily agricultural nation of 4 million people to an industrial power of 290 million. How the Civil War, World War I, and World War II affected our economy. How our nation was shaped by suburbanization after World War II. What major factors affected our economic growth decade by decade from the 1920s into the new millennium. What the new economy is and how it differs from the old economy. Introduction Our economy is a study in contrasts. We have poverty in the midst of plenty; we have rapidly expanding industries like computer software and medical technology, and we have dying industries like shipbuilding and consumer electronics; we have won the cold war against communism, but we may be losing the trade war against Japan and China. Which country has the largest economy in the world, the United States, China, or Japan? Believe it or not, our national output is more than that of China and Japan combined. America is the sole superpower and has one of the highest standards of living in the world. Communism, to borrow a phrase from Karl Marx, has been swept into the dust- bin of historyat least the version that dominated the former Soviet Union after the 1920sand Eastern Europe after World War II is no more. The baby-boom generation has earned higher incomes than any other generation in history. Indeed, Americans once considered it their birthright to do better than their par- ents. But that ended more than 30 years ago, and a lot of young people are worrying about their futures. In the decade of the 1990s our economy generated more than 22 million new jobs. Thats the good news. The bad news is that half of them pay less than $15,000 per year. These so-called McJobs are often low-level, minimum wage, dead-end positions with no sLa54774_ch01_01-22 11/27/03 09:37 Page 1 2 C H A P T E R 1 health benefits. Worse yet, during the first two-and-a-half years of George W. Bushs presidency, our economy has lost almost 3 million jobs. The children of the first baby boomers have already entered the job market. And their parents, after paying $25,000 or more a year to educate them, are wondering about their childrens job prospects. Between 1997 and 2000, the job market was the strongest in memory, partly because large corporations, in their aggressive downsizing drives, may have laid off too many workers of their parents generation. Jim Morin, a cartoonist, put it this way: Hi dad....
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