Economic Inequality in America – Part 3 – The Greatest Generation Builds an Economic Powerhouse
Summary: Reading Time: 3 minutesIt is called the “great compression period” by economists and historians who study inequality in American history. It is the period during and following World War II when the Greatest Generation returned home from the war. I personally think this title is a bit misleading and understanding what caused the great compression will explain my thoughts here. The great compression period was extremely necessary for the American economy but it was not sustainable. History proved this.<br> <br> <br> As the Greatest Generation returned from World War II many of the leaders and policy makers within the American government were unsure what would take shape. When the war began America was still struggling with the Great Depression. The war ended the Great Depression but as tens of thousands of soldiers returned home in need of jobs – would that trigger a return to the conditions of the Great Depression?<br> To combat this the US government went to unprecedented lengths so they could be certain the Greatest Generation would have every chance for success. Prior to the New Deal policies in the 1930s (the era when the Greatest Generation came of age) the government was very hands off in American’s daily lives. That changed in the course of the New Deal’s efforts to end the depression. These efforts were largely unsuccessful but it did help reshape the image and role of the federal government in the eyes of the Greatest Generation. Due to this, it was not difficult to for the US government to resume its active role in the lives of its citizens after World War II.<br> <br> This was what caused the great compression. From the GI bill, to housing assistance, to job training, the American government poured money into the economy to lift up the Greatest Generation. In the course of the next couple of decades they also poured money into defense and technology spending, which created jobs for the Greatest Generation. The period of the great compression is known as this long period when American wages were brought in line to one another. Inequality faded away. There were still rich and poor classes but there separation from one another were nothing like what we experience today or what was seen prior to the depression.<br> This great compression period was when the ideas of the American dream became firmly rooted into American society and culture. It was the belief that any American, if he or she worked hard enough and played by the rules, could make a better life for themselves and their children. Few people realized it at the time but the American dream was subsidized by massive spending from the American government. This was what caused the great compression.<br> All of this sounds great right? Many left leaning economists and historians explain how this period of the great compression proves how we should and could end economic inequality. Income distribution managed by government taxation and spending leads to greater economic equality and greater economic production. These were hugely productive decades for the American economy after all in the 1950s and 60s.<br> There is a problem to this line of thinking however and I will talk about this in a future episode in the series. There came a price to pay for all of this spending and government involvement with the economy.<br> <br> <br> <a href="http://feeds.feedburner.com/~r/theendofhistory/PHVq/~6/1" target="_blank" rel="noopener"></a><br> <a href="https://feedburner.google.com/fb/a/headlineanimator/install?id=nb64uri41haerm5fvtnnavfgjo&w=1" target="_blank" rel="noopener">↑ Grab this Headline Animator</a><br> <br> This is part of my <a href="https://wp.me/p2iDfo-1su">Complete Guide to Understanding Inequality in America</a>. Check it out for more podcast episodes, infographics and articles and on this topic. Check out all of my<a href="http://www.theendofhistory."></a>
