Individual worker productivity rises an astonishing 43 percent from 1919 to
1929. But the rewards are being funneled to the top: the number of people
reporting half‐million dollar incomes grows from 156 to 1,489 between 1920 and
1929, a phenomenal rise compared to other decades. But that is still less than 1
percent of all income‐earners.
The Smoot‐Hawley Tariff passes on June 17. With imports forming only 6 percent of the GNP, the 40 percent tariffs work out to an effective tax of only 2.4 percent per citizen. Even this is compensated for by the fact that American businesses are no longer investing in Europe, but keeping their money stateside. The consensus of modern economists is that the tariff made only a minor contribution to the Great Depression in the U.S., but a major one in Europe.
Recession begins in August 1929 , two months before the stock market crash.
During this two month period, production will decline at an annual rate of 20
percent, wholesale prices at 7.5 percent, and personal income at 5 percent.