Postwar Economic Anxieties

Domestic and Foreign Policy

• 1930s Had a lot of Insecurity (job, food, home)

• The increase in stress and anxiety had mental health impacts (suicide rates went up during Great Depression)

• Marriage and birth rate declined because of economic insecurity

• Americans were fearing the return to pre-war conditions and lead to a Depression

  Economy

  Signs of recession

• GNP declined

  • during war years America was making war products at high levels

  • The war was over and demand dropped

  • The Ford motor company doesn’t have to make jeeps and airplanes and can go back to cars , so they have to reconfigure plant, which resulted in a decline in production

  • They needed to retrain staff/assembly line (relearning they did prior to the war)

• Inflation: high employment rates during war (people were saving money), Americans want to spend (16 years of no spending from Great Depression and rationing for war)

  • Inflation: too many dollars chasing too few goods

• Inflation rate was at 25% after WW2 was over

  • The reason was because of conservative congress and truman knew recession was going to happen

• Wage ceiling during War years were removed during war years, resulting in an increase in wages and bosses don’t give it to them so wages are stuck at pre-war levels, but inflation has gone up 25% and their cost of living has gone up significantly and their wages haven’t gone up accordingly, so the workers strike

• In 1919: 3000 work stoppages
  In 1946: 4.5 million go on strikes

• Taft Hartley Act: Truman was a democrat (more pro labor)

  • The act under a democratic president was pro-business & anti-labor peace of legislation

  • Truman was democrat, and this bill was vetoed by Truman but bill became act

• Congress overrode the Presidential veto (need ⅔ of vote to override)

• Key provisions:

  • The overall purpose was to curb growing power of Labor Unions (grown in strength; membership during WW2 and New deal years = increase political strength)

  • Outlawed the closed shop (Union only workers)

  • Right to work laws (have to give right the work)

  • Outlawed secondary boycotts

  • Granted the president the power to invoke a 60 day cooling off period

    • no strike for 2 months, need agreement between two sides

  • GI Bill: Servicemen’s readjustment act

    • Concerns of leader: what are we going to do with 15 million soldiers who are going back to civilian life (concern = go back to depression)

    • How can we delay veterans from going back to civilian life

    • Provisions

      • One year of unemployment benefits (take one year to relax)

      • $52/month (pay for rent, spending money, food)

      • Offer veterans opportunities to continue education at taxpayer expense (technical, vocational, college/university) and give them monthly stipend to take care of monthly expenses (off campus apt., dorming, food, etc.)

      • 6 million veterans take advantage of that provision because before WW2, rich kids went to colleges (working class family = no college = went to work after high school)

      • Open access to colleges

      • Opened more colleges and expansion of colleges (more classrooms and dormitories) promoted new construction

      • New jobs (masons, framers, carpenters, electricians, plumbers, painters) were created

      • Brand new classroom facilities meant hire more teachers

      • Simple and effective, then when veterans graduate from school they would become more productive workers

      • Gi bill offered low interest loans to start new businesses, farms, or homes

      • Millions take advantage of buying new houses

      • People Have to build more houses, leading to a construction boom, which created jobs

• The act Stimulated economic expansion and promoted new construction and a better educated workforce

1948 Election

• Harry Truman was democratic president

• one point in time his approval rating wassuper high (during dropping bomb on Japan)

• inflation was blamed on Truman and his approval rating drops

• Republicans were confident that they’re going to win the election, Truman has low approval rating, and then democratic party was divided (major split)

• The liberal democrats believed that Truman’s foreign policy was too aggressive and it would disrupt international peace

  • The liberal dems form their own party (new-old party, new progressive party)

  • The southern democrats were upset with Truman because he stood for civil rights because he signed an executive order that integrated the military and in 1948,

  • the dem platform will contain a plank supporting African Americans, and southern dems form states right party (Dixiecrats; official name = the states right party)

• In 1948, Truman is nominated by the democratic party, former VP wallace (FDR’s VP before Truman) ran for progressives

• Strom Thurmond ran for the dixiecrats and served in Congress

• He leaves dem party and becomes republican

  • when civil rights bill was being heard, he filibustered for 24 hours had floor for 24 hours and voted against civil rights bills

  • He kept talking to prevent it from being passed

• Thomas Dewey was renominated by Republicans and had a dull, overly cautious campaign

• Truman’ s give-em-hell Harry tour:

  • It was all across the country and blasting Congress (Do-Nothing-Congress) and on election night, all political prognosticators predicted thomas dewey landslide

  • Truman ends up winning the election (biggest upset/comeback in American presidential history w/exception of Southern whites)

  • Kept new deal coalition together and able to win election

  • Truman proposes Fair Deal

Fair Deal

• He wanted American people to know that this was going to be an extension of FDR’s new deal

• Liberal reform program and ambitious in its scope

• Measures proposed

• National healthcare insurance

• Federal aid to education (being funded at the state and local level)

• Civil rights legislation

• Funds for public housing (low income + poor people)

• New farm program

• Truman is trying to take care of the Forgotten Man

• None of the measures get passed by Congress because Truman needs them to do something they said nothing (personal conflict w/congress) and Cold War (foreign policy = dominant problem from 1945-1991)

• Sign into law in increase in minimum wages (40 cents to 75 cents)

• Extend social security to include more workers

• Economic boom

  • Brief recession

  • Long period of sustained growth (lasts for 2 decades through 1950s and 60s, some recessions, but in ‘20s = fewer people enjoyed prosperity and 50s/60s = more people enjoyed prosperity)

• Signs of prosperity

  • National income doubled nearly twice

  • Size of middle class increased (more people sharing in the economic prosperity of the era)

    • people owned houses, cars, and tvs (didn’t have enormous debt people had in 1920s)

  • Top 10% of Americans control 36% of planet’s wealth

• Differences between 1920s and 1950s/60s

  • Most new jobs went to women *American economy was in a period of transition (from colonial to civil war—agrarian to industrial economy)

  • After ww2 (economy was shifting from industrial to service-based economy—lawyer, accountant)

    Reasons for Economic prosperity

    • WW2 was a powerful stimulus because people had well-paying jobs and they saved

    • Defense spending (10% of GNP) spring up in Sunbelt

    • Cheap energy (price of oil was very low)

    • Better educated workforce

    • Social effects: major demographic changes in post ww2 period

• Construction boom

  • most americans were moving to suburbs and leaving the cities, an example of 1950s suburbs

  • Example:

    • planned community of Levittown (Long Island), William levitt built military housing during war and recognized demand for new housing and bought a potato farm, and bought a forest for wood and then bought a railroad and trucks to transport

• Controlling all aspects of production

• Vertical integration (Carnegie)

• American dream is to move to suburbs, good schools, houses and people all look the same

• White Flight:

  • Americans were moving out of the cities to the suburbs (taking purchasing power and tax dollars)

  • Businesses move to the suburbs and taking their revenue out

• White Flight

  • Urban decay and cities are going to decay for decades (Sanitation budget goes down, police budget, and school budget goes down)

• Majority of Americans moved to Sunbelt (virginia to florida and across Gulf Coast and all the way to California) because:

  • Economic opportunity

  • Climate (better weather)

• Lower taxes and cheaper living

• Baby Boom:

  • Largest generation in American history

  • Renewed confidence in American economy

  • People get married at younger ages and have larger families (1946-1964): 50 million newborns (largest generation in American history)

  • Benefits: Baby industry thrives (clothes, food, furniture) and puts strain on economy (teacher shortages, strain on social safety net, crowded jobs, crowded schools), constructing infrastructure (tax bearers = addition of schools, but beneficial for creating jobs)

Economic boom:

• Cheap energy, defense spending, better educated workforce, world war ii (people had well paying jobs and started to consume)

• Any kind of migration was an economic opportunity

• Sunbelt migration was an economic opportunity

  • climate, lower taxes/cheaper living

The Cold War Begins

Conflict in Europe

• Following WWII, tensions were high between the western Allies and the Soviets

• Neither side trusted the other

• Stalin was determined that the USSR would not be invaded again

Causes of the Cold War

• Ideological Differences:

• Soviet Union: communist (both political and economic system (no private ownership of businesses–gov controls it, no classes—everybody’s supposed to be equal); totalitarian dictatorship (no freedom of religion, speech, etc.)

• United States: democratic, republic, capitalism (businesses were owned by individual citizens w/gov. regulation)

• Both compete for global dominance

• War Conflict

• Disagreement over military strategy in WWII

  • Stalin wanted a front opened in Europe much earlier (After germany invaded USSR; Churchill and Roosevelt did not heed request; Second front doesn’t open in June 1944; 2 years where Hitler concentrated forces to fighting USSR, and stalin never forgave Allies)

• Roosevelt did not trust Stalin (non aggression pact)

• US secret development of the atomic bomb

• Post War Disagreements

• Americans feared what Stalin may do in Eastern Europe-had promised free elections and does not live up to it *began in Yalta

How did each president handle the cold war conflict? Did they increase or decrease tension

Soviet Action in Eastern EUrope

• Stalin had promised free elections and self-determination (the right to decide how a nation should be ruled), but does not live up to that

• Stalin felt that he was fully justified in wanting to control all of Eastern Europe (as a defense from Germany and others in Western Europe)---he wanted to create a buffer zone (especially since Germany invaded USSR twice)

• Stalin outlawed political parties that opposed communism, jailed opponents, and rigged elections

The Cold War Begins

• Stalin decided that he must maintain control over Eastern europe in order to keep a buffer between the USSR and the nations of the West

• STalin established satellite nations, or countries controlled by the Soviet Union, in several Eastern European countries

• Satellite nations were controlled by USSR

• Winston Churchill said in a speech, “A shadow has fallen… an iron curtain has descended across the continent”

• Iron curtain was a phrase used to refer to the dividing line between Communist nations in Eastern Europe and Democratic nations in Western Europe

Satellite State

• When a nation is under the control of another

• Ex. part of Germany wasunder the control of the Soviet Union

• Poland, Czechoslovakia, Hungary, Romania and Bulgaria

US Post-War Policies in Europe

• 1946: US diplomat George Kennan recommend that the US and its allies focus on a strategy of containment

• Kennan believed that the Eastern Europe was firmly in Soviet hands and could not be saved from Communism

• The US and its allies should focus on containing Communism to those countries it which it already existed and not let it spread any further

• The Truman Doctrine stated that the US would not hesitate to intervene and aid nations overseas to resist Communism

• *key application: in 1947

• $400 million in aid to Greece and Turkey to fight against communism (gateways to Europe and Asia)

• Stalin was industrializing USSR, US afraid of communist expansion

• US believes it is responsibility to combat communism all over the world

• Was the Truman doctrine successful? —does it heighten aggression? Does it stop communism (Greece and Turkey weren’t communist states, so Truman doctrine was successful, successfully prevents communism, but US and USSR were still competing for territorial possession and stalin accuses US of economic imperialism since the US was using industrial economic power to be a global influencer)

• Success from literal point (prevents spread of communism). However, it increases division between US and USSR (most of truman’s policies)

• Reinhold Neibuhr: Good v. Evil

• Shows US and USSR competing for territory globally

Europe: devastated by war

• The Marshall (European Recovery program) Plan provided nations in war-torn Europe with much needed financial support

• Purpose of the Plan was to help prevent Communist revolutions, which are often started due to economic hardships, in Western European nations

• Marshall received the Nobel peace Prize as a result
  US infrastructure was unscathed

• Europe was in need of a major rebuild and was in economic hardship

• socialism appeals to people because people of Europe were fearful that the end of the war meant to return to the depression (their recession was worse than US after WWII and brutal winter in 1946/1947, so morale was low in Western Europe)

• Italy and France saw a substantial increase in membership in communist parties

• american leadership was concerned

The Marshall PLan

• US wanted to strengthen Western Europe to make sure countries wouldn’t fall to Communism

• 1947: Plan called for $17 billion in aid to Europe

• Soviets were offered aid, but they refused

• Saw it as a plot to strengthen capitalism

• Economic alliances increased division between US and USSR

• Brilliant because it does help the European recovery

  • The health of US economy was dependent on European economy

  • Europe is rebuilding, and they’re going to buying from the US, so we send out money over there and its a return on investment (GI Bill + Marshall PLan= return on investment for American taxpayers)

A divided Germany

• When WWII ended, the Allies divided Germany among themselves

• US, Britain, France, and the USSr all received a portion of Germany

• The German capital, Berlin, was also divided the same way

• Post WWI and WWII goals:

  • keep Germany weak but difference is that no harsh reparations were placed on germany (they contributed to economic collapse in Europe after WWI → global depression → rise of dictators) avoid this by occupying Germany and Berlin

• This makes it difficult though (berlin falls into Soviet Occupation zones)

• US, Britain and France saw division as temporary and believed Germany would become united again under a democratic government

• But Stalin had no intentions of giving up the Soviet-controlled areas (serve as Buffer state)

• US, Britain, and France unified their sectors into one nation, west germany, and declared west berlin to be part of this new nation

• USSR responded by est. East Germany and the east. Berlin under communist rule

• Thousands from East Germany fled to West Berlin to escape Communism

• Stalin decided to force the West to surrender its portion of Berlin by blockading the city

• Truman then authorized the Berlin Airlift—using planes to deliver supplies and food to those in West Berlin

  • He funded and performed overwhelmingly by US (dropped medical supplies, food, and clothing)  (90 days of food supplies or they die)

  • Berlin lift was very important because the Europeans were skeptical of US (throwing money around but why?---altruism or selfishness?)

• US used to be a moral leader of the free world (dropped gifts to children on Christmas)

• Stalin calls off blockade

• The Soviets finally gave up in May of 1949, but this bitterness served to fuel the fires of the “Cold War”

• “Cold War” was first used in 1947 by Bernard Baruch; it referred to the tension between the US and the Soviet Union that dominated both nations’ foreign policies for decades

• Cold war was an indirect conflict (1946-1991—dissolution of USSR)

Alliances even form:

• NATO: North Atlantic Treaty Organization

• Did not join league of nations after WWI but did after WWII

• Collection of 26 nations (US, UK, France, Belgium, Italy, Canada, Denmark, Portugal, etc.)

• Agreement that an armed attack against one member nation would be considered an attack against all (ex. Kosovo during Clinton administration)

• Defense agreement

• China and Korea

• 1949: china became a Communist nation following a revolution

• Mao Tse-Tung (Zedong) led the revolution and assumed power as the new leader and defeated Chang Kai Shek (forced to flee to Taiwan)

• US believed there was a communist plot to rule the world

• Political impact: Republican blames 1950 midterms, blamed Truman and democrats for not doing enough for Communist

• US uses its influence to make Chang Kai shek prominent

  • This Angered Stalin and he Did not participate in UN for a period of time (Soviets have no absolute veto power)

• UN should sanction military action against North Korea and the resolution passed

• By 1949, the Soviet Union develops an atomic bomb of its own

• The arms race begins

• Truman shared bomb info w/American public  (September 23, 1949)

• American public knows USSR has bomb; significance: start of the arms race between US and USSR

• Ex. of Successful Containment: Truman Doctrine, Berlin Airlift, NATO, Marshall Plan

• Ex. of Failing Containment: China falling to Communism, Vietnam, and Cuba in 1959

A Divided Korea

• Korea was controlled by the Japanese before WWII

• Allied leaders decided Korea should be free of defeated Japanese control at Yalta Conference

• Meant to be temporary

• Koreans on both sides wanted a unified nation

• Decided to divide at 38th parallel

• North Korea—controlled by the Soviets

• Democratic People’s Republic of Korea (a totalitarian communist state)

• South Korea—controlled by America

• Republic of Korea

The Cold War Begins: The Korean War (1950-1953)

• June 1950: The Korean War began when North Korea crossed the 18th parallel

• The United Nations decided to come to South Korea’s aid, and Truman chose General Douglas MacArthur to lead the troops; The US does most of fighting

• North korean forces took over 90% of South Korea

• First war of “Containment’ policy to stop communism

• Forgotten war in history

• General Douglas MacArthur commands US and UN troops

• MacArthur’s troops pushed the enemy back across the 38th parallel and advanced to the Chinese border

• MacArthur believes that he can drive communism back, but Truman was apprehensive

• MacArthur believes that if he rids Korea of Communism, he would get elected as President (he also led the Army against the Bonus Marchers)

• The Chinese sent troops across the Yalu River to help the North Koreans

• MacArthur asked Truman to authorize the use of nuclear weapons against China, but Truman refused

• Battle of Yalu: 400,000 Chinese “volunteers” joined North Koreans (overwhelmed American forces) and it was the worst American defeat in history

• War turns again and the north koreans and chinese are forcing SOuth Koreans and US across 38th parallel

  • THis was a humiliating defeat for MacArthur (egotistical jarhead) so he has a plan which includes:

    • A Naval Blockade around China (escalates war), Chang Kai Shek and nationalists of Taiwan to help invade China, and use 50 nuclear weapons against China

• China and USSR have mutual defense agreement

  • The US drops bombs on China or the USSR drops bombs on us

  • MacArthur thinks the will end the war and end communism in Korea and in China, but truman said no

• MacArthur starts to publicly criticize President of US (commander in chief of US)

  • MacARthur got fired, but gets his job back

• 70% of AMerican public agreed with MacArthur

• Matthew Ridgeway takes over war and drives north koreans back across 38th parallel

• A stalemate soon developed

• Truman fired MacArthur after the general criticized Truman’s handling of the war

• After 2 more years of fighting, both sides signed a truce in 1953

• North Korea is still communist and South Korea is Democratic; The 38th parallel is a demilitarized zone

• This agreement left the country divided at almost the same point as before the war began

• Containment is successful

• 50,000 Americans died, cost US $30 Billion, the Republicans used Korean war as political capital against Truman and Democrats for being soft on Communism, truman’s approval rate is low (doesn’t seek reelection for presidency)

• Korean war was the main issue for election of 1952 (Repubs win Congress + white house)

• Contributes to Second red scare

First Meeting of United Nations: April 1945

US was the first nation to sign charter of UN

• Early UN Successes

• Helped est. Jewish state of Israel in Palestine

• Helped some former colonies to independence

• UN’s biggest initial failure was inability to agree to ban nuclear weapons (USSR wants it but US says no since at that time we are only one with it; The US liked its power)

The Founding of ISrael

• The Holocaust increased support for the founding of a Jewish homeland

• May 14, 1948: With the support of the newly formed UN, the new state of Israel officially became an independent state

• Arab nations greatly resented the decision to give part of Palestine to the Jews

• They claimed the entire region belonged to Arabs

• Israel’s boundary also had an impact on the Cold War

• US and Israel became allies and the Soviets began supporting Arab nations

• US was the first nation to recognize Israel

• Middle east was oil-rich and it resulted in foreign policy problems for US forever

America begins to rearm

• Soviet menace resulted in creation of huge new national security apparatus

• National Security Act of 1947:

  • Created Department of Defense

  • Headed by new cabinet office, Secretary of Defense

  • Under the secretary, were civilian secretaries of the navy, the army, and the air force

  • Uniformed heads of each service brought together as Joint Chiefs of Staff

• Established National Security Council (NSC) to advise president on security matters and Central Intelligence Agency (CIA) to coordinate gov.’s foreign fact gathering

• Congress:

  • Authorized “Voice of America” (1948) to beam American radio broadcasts behind Iron Curtain

  • Resurrected military draft: conscription of selected young men from 19 to 25

  • Selective Service System shaped millions of young people’s educational, marital, and career plans

    Reconstruction and Revolution in Asia

• Reconstruction in Japan:

  • Simpler than Germany because a one-man show

  • MacArthur led program for democratization of Japan

  • Top “war criminals” tried in Tokyo 1946-1948

  • 18 sentenced to prison terms; 7 hanged

  • Met Hirohito, was a dictator in est. in Democrat

  • MacArthur successful and Japanese cooperated to an astonishing degree

• MacArthur-dicated constitution adopted in 1946:

• Renounced militarism; provided for women’s equality

• Introduced Western-style democratic government

• Paved way for Japan’s phenomenal economic recovery

• H-Bomb:

  • To outpace Soviets in nuclear weaponry, Truman ordered development of Hydrogen bomb

  • H bomb is much more powerful than atomic bomb

  • J Robert Oppenheimer led group of scientists in opposition to development of thermonuclear weapons

  • Albert Einstein declared “annihilation of any life on earth has been brought within the range of technical possibilities”

• US exploded first hydrogen device in 1942

  • Soviets countered w/their first H-Bomb explosion in 1953

• Nuclear arms race entered perilously competitive cycle

• ONly constrained by recognition that truly hot Cold War would be destroy the world

The Cold War Home Front

• COld war deeply shaped political and economic developments at home after WWII

• New anti-red chase accelerated by fears of communist spies in USA:

• In 1947, Truman launched massive “loyalty” program:

• Smith Act: First peacetime anti-sedition law since 1798

• HUAC: House Un-American Activities Committee —investigate subversion

  • In 1948, Richard Nixon led chase after Alger Hiss

  • Prominent ex-New Dealer

  • Distinguished member of eastern est.

  • Accused of being a communist agent in 1930s

  • Hiss demanded right to defend himself

  • Dramatically met chief accuser before HUAC in August 1948

  • Hiss denied everything but was caught in falsehoods, so he goes to jail

Julius and Ethel Rosenberg:

• Allegedly leaked atomic data to Moscow

• Convicted in 1951 of espionage

• Went to electric chair in 1953

• Only people in American history ever executed in peacetime for espionage

• Sensational trial and electrocution, combined w/ sympathy for 2 orphaned children, began to sour some citizens on excesses of red-hunters

• Anti-semitism after WWII

• Part of red history

• Julius Rosenberg was in fact a spy (only a courier) but Ethel - was not

US was More interventionist after WWII:

• Marshall Plan, Joining the UN, Truman Doctrine, Berlin Airlift, Joining NATO, korean war

After WWI:

• more isolationist (rejected league of nations)

Outcomes of korean war:

• Containment was successful (south korea was democratic republic, north korea used communism)

• Republicans win white house and Congress

• $30 billion

• The POlitical career of truman ended

• HUAC and Alger Hiss play role in Nixon’s political career, who is a Rising conservative star w/ republican party