[APUSH 2] My Life Vocabulary

Good Neighbor Policy

US foreign policy in the 20s and 30s to treat Central and South America as equals (started by Coolidge)

Inflation

when there’s more money in the economy than there are goods and services

• Prices and wages rise when there’s more money than goods & services in the economy

• Example: Tickle Me Elmo was priced at $39.99 (in 1999), but one woman paid $10,000 dollars for 2 Tickle Me Elmos, as their production was being stopped temporarily. This toy was extremely popular back then, and everyone wanted it before.

• Prices go up first, wages follow afterwards. Prices also go up a higher percentage than wages do, making inflation a bad thing.

Deflation

when there’s more goods and services in the economy than there is money (unemployment rises)

• Prices and wages fall when there’s more goods & services in the economy than there’s money

• With deflation, there’s no shortages in anything, and you can find whatever you need for cheaper. However, this leads to higher rates of unemployment.

• Businesses tend to lay off people (so that their workers don’t decrease in productivity)

• The Great Depression was a MASSIVE deflation

Stocks

certificate that gives you part ownership of a company

• High risk, high return

• Technology Stocks are the most volatile (they go up and down a lot)

• Tortoise and the Hare = bonds are the tortoise and stocks are the hare (Gima analogy)

Bonds

a loan given to a company that they must pay back with interest

• Safer than stocks, but doesn’t give back as much as stocks are able to

• Tortoise and the Hare = bonds are the tortoise and stocks are the hare (Gima analogy)

Buying on Margin

paying part of the stock price upfront, and paying off the rest later

• Example: You pay $5,000 upfront, but you want $10,000 worth of stocks, so you pay a $5,000 margin over time. This is extremely risky though, because shares can increase and decrease a lot in price. Increases are good for you, but decreases are horrible.

“Black” Tuesday (10/29/29)

the day the stock market crashed, revealing the Great Depression

• Happened on October 29, 1929

• Stocks plunged 508 points, with a drop of 22.6%

• 604 Million stocks were bought/sold on that day

Gross National Product (GNP)

total value of all goods & services produced by a nation in a year

• 1929 GNP = $110 Billion

• 1933 GNP = $54 Billion

• GNP typically increases 1-2% every year

Gross Domestic Product (GDP)

total value of all goods & services produced in a nation in a year

• Example: If Ford motor company sold a car, it would automatically be GNP because Ford is an American company. If a car by Ford was sold in America, it would also be considered GDP. However, if a car by Ford motor company was sold in Japan, it would be considered as GNP, not GDP, because it’s not being sold domestically.

Hoovervilles

homeless villages put up in parks

• Central Park was the largest Hooverville in the world

• Called “Hooverville” because of Herbert Hoover

• Fire could easily wipe out an entire Hooverville because of living conditions, with the amount of trash that was there

Bonus Army

WWI veterans who marched on Washington D.C, seeking an early pension from the government; scares Congress

• Government said in the 20s that in 1945 that they would give a $1000 pension to veterans. This was done because of the good economy in the 1920s. 

• They call themselves the “Bonus Expeditionary Force,” which was derived from the American Expeditionary Force from WWI

• Congress says yes to giving the pension early, but Hoover says HELL NO to this early pension and vetoes it.

• Congress proposes that they give all the veterans a one-way bus ticket and $20, and override Hoover’s veto on this. About ⅓ of the veterans take this, and the other people that don’t accept this “compromise” call the ⅓ “sellouts”.

• Hoover gets the US military (tanks, soldiers, etc.) to drive the Bonus Army out of the Capitol

• Douglas MacArthur leads them

Dust Bowl

refers to drought-like conditions in the midwest during the early 30s; people move to California

• California becomes one of the most populated states due to the Dust Bowl

• The entire midwest becomes almost uninhabitable, as it doesn’t have any mountains or trees, making it extremely susceptible to the wind

• Loose dirt (due to dry conditions) is blown around a lot, causing a big dust storm

  • You could lose your livestock due to this

• Dust Bowl happens in NYC (dust from midwest travels all the way to northeast America)

New Deal

FDR’s plan to ease the Great Depression

• Doesn’t succeed in ending the Great Depression; WWII ends the Great Depression

• Congress was so scared due to the Bonus Army, and Congress passed anything FDR wanted to do (not possible today)

• Most powerful president since TR & Lincoln

Brain Trust

FDR’s unofficial advisors who helped him create the New Deal

Fire Side Chats

radio addresses (speeches) meant to calm the nation

• FDR is the first president to utilize the radio like this, and no president has done this before

• JFK does this with the TV, and Donald Trump does this with Social Media

Bank Holiday

when FDR closed the banks for 4 days to stop the Panic of 1933

Federal Deposit Insurance Corporation (FDIC)

protects bank deposits up to $250,000

• Before it was only to $5,000 but it increased over time

Agricultural Adjustment Administration (AAA)

pays farmers to grow less crops

• The Great Depression started first for farmers, and they were told to grow less crops to raise prices for food, but this doesn’t work well because no one can pay for food

• Most controversial “New Deal” program

Social Security Act

provides a pension for the elderly & disabled, starting at 65

• 2nd most expensive program in American History (big contributor to national debt)

3 R’s (Relief, Recovery, Reform)

the basis of all New Deal programs

Frances Perkins

first female cabinet member, and was FDR’s Secretary of Labor

NIRA/NRA (National Industrial Recovery Administration):

when the government promotes businesses that agree to a minimum wage and price controls

Lochner v. NY (1905)

Supreme Court case that said that the government may not interfere in the relationship between a business and its employees; starts the Lochner Era

• Lochner allows people to work over 60 hours (not allowed) at his bakery, and the state of NY fines him

• State of NY deems it dangerous for people to work more than 60 hours near ovens

• For the next 30 years, the US tries to knock down minimum wage laws, and the government can’t stop it (essentially an era of laissez-faire)

• Note: this Supreme Court case happened prior to this era, but still has relevance due to its nature and the precedent it set

Schecter “Sick Chicken” Case (1935)

Supreme Court case that said the NIRA was unconstitutional

Court “Packing” Plan

proposed law by FDR that would add 1 Supreme Court Justice for each one over 70 years old; never passed

• Under this law, FDR could’ve expanded the court to a maximum of 15 justices

• Congress actually said no to FDR once, and denied this, because it would give the executive branch too much power

West Coast Hotel v. Parrish (1937)

Supreme Court Case that said the minimum wage was constitutional, ending the Lochner era

Executive Order

presidential action that changes how an existing law is enforced

Deficit

amount of money the government spends per year over what it takes in

• For instance (purely hypothetical), if the government got $100 in 2025, and the government spent $150, it would be in a deficit of $50. The government would then issue $50 bonds, and you could get $100 from it in 2035. However, bond payments rise over the years.

Debt

deficits added up over time

• 3 Main Things that Contribute to the National Debt

  • Medicare/Medicaid

  • Social Security

  • Military