Accordingly, people had to be persuaded to abandon such traditional values as saving, postponing pleasures and purchases, and buying only what they needed. "The key to economic prosperity," a General Motors executive declared in 1929, "is the organized creation of dissatisfaction." Advertising methods that had been developed to build support for World War I were used to persuade people to buy such relatively new products as automobiles and such completely new ones as radios and household appliances. The resulting mass consumption kept the economy going through most of the 1920s.
However, although this was the case, there were great underlying problems produced by American Capitalism, which was revealed by the Great Depression. First of all, income and wealth was distributed very unevenly, and the portion going to the wealthiest Americans grew larger as the decade proceeded. Thus, in 1929, the top 0.1 percent of American families had an aggregate income equal to that of the bottom 42 percent. The top 5 percent of American families received 30 percent of the nation's income; the bottom 60 percent got only 26 percent. About 71 percent of American families had annual incomes below $2,500. Nearly 80 percent of the nation's families had no savings; the top 0.1 percent held 34 percent of all the savings. The top 0.5 percent of Americans owned 32.4 percent of the net wealth of the entire population, the greatest such concentration of wealth in the nation's history. .
The Great Depression also revealed that workers and consumers by and large received too small a share of the enormous increases in labor productivity. Better machinery and more efficient industrial organization had increased labor productivity enormously. However, salaries and wages had not risen nearly as much. Thus, American Capitalism was being steered as an automobile, with one foot pressed to the accelerator of production and another on the brake of consumption.
