Page 215 - Psychology of Money - Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)
P. 215
Just under two million homes were built from 1940 to 1945. Then seven
million were built from 1945 to 1950. Another eight million were built by
COBACOBA
1955.
Pent-up demand for stuff, and our newfound ability to make stuff, created
the jobs that put returning GIs back to work. And they were good jobs, too.
Mix that with consumer credit, and America’s capacity for spending
exploded.
The Federal Reserve wrote to President Truman in 1951: “By 1950, total
consumer expenditures, together with residential construction, amounted to
about 203 billion dollars, or in the neighborhood of 40 percent above the
1944 level.”⁷⁴
The answer to the question, “What are all these GIs going to do after the
war?” was now obvious. They were going to buy stuff, with money earned
from their jobs making new stuff, helped by cheap borrowed money to buy
even more stuff.
4. Gains are shared more equally than ever before.
The defining characteristic of economics in the 1950s is that the country got
rich by making the poor less poor.
Average wages doubled from 1940 to 1948, then doubled again by 1963.
And those gains focused on those who had been left behind for decades
before. The gap between rich and poor narrowed by an extraordinary
amount.
Lewis Allen wrote in 1955:
