- The 1920s saw a business boom as mass production became more efficient and everyone started making more money. This led to closer ties between the federal government and the business world. Economic policy became more "hands off," with lower taxes and fewer social programs. Two key examples of this are the lowering of high tax rates and cutbacks in Federal Trade Commission funding.
- Tariffs were an extremely important political advance made during the 1920s. They were passed in order to protect American business from foreign competition; if foreigners couldn't import goods without a tax, then they couldn't compete with American companies, which would theoretically allow those companies to thrive. However, by cutting off foreign suppliers from American markets, the tariffs actually reduced their income, which in turn reduced their demand for American goods. This was one of the key political advances that contributed to the Great Depression.
- Prohibition played a major role in the United States during the 1920s. Alcohol was prohibited in 1920, but people did not stop drinking. Rather, drinking was just driven underground. This means that police funding dramatically increased , as did the net state and federal prison populations. This also gave organized crime a foothold that persisted into present day. While organized crime no longer deals in liquor, it is liquor that gave crime bosses the money and clout they needed to move into other areas.
- Warren G. Harding tempered the global arms race in the early 1920s by negotiating a treaty. This treaty stipulated that Japan could build 30 percent of the ships that the U.S. and Britain built, and Italy and France could only build around 10 percent of the ships that the U.S. and Britain built. This set the stage for World War II, as it made it clear that Japan would have to fight for global dominance.
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