Cold War At Home

Themes:  Americans had to adapt to change  Fear of Communism was everywhere  This had a powerful effect on domestic policy  Americans had to adapt to change  Fear of Communism was everywhere  This had a powerful effect on domestic policy

Influences on domestic policy  Conversion to a peacetime economy  Calling for black civil rights  Legacy of the New Deal  Conversion to a peacetime economy  Calling for black civil rights  Legacy of the New Deal

Return to Depression?  After WWII, the biggest fear was that the Cold War would return the economy to depression  Gov’t spending did drop  Consumer spending INCREASED  Workers had amasses large amounts of wartime savings  After WWII, the biggest fear was that the Cold War would return the economy to depression  Gov’t spending did drop  Consumer spending INCREASED  Workers had amasses large amounts of wartime savings

GI Bill  GI Bill put money into economy by providing educational and economic assistance to returning veterans  War production shifted back to civilian production  Veterans entered the workforce, but unemployment did not increase  GI Bill put money into economy by providing educational and economic assistance to returning veterans  War production shifted back to civilian production  Veterans entered the workforce, but unemployment did not increase

Economic Policy  Inflation was a huge problem  Truman was fearful of lifting the wartime restrictions on prices and rationing  If done too quickly, it would have a negative impact on the economy  1946: he lifted all restrictions, and inflation increased to a rate of 18.2% annually  Food shortages and goods shortages angered consumers  Inflation was a huge problem  Truman was fearful of lifting the wartime restrictions on prices and rationing  If done too quickly, it would have a negative impact on the economy  1946: he lifted all restrictions, and inflation increased to a rate of 18.2% annually  Food shortages and goods shortages angered consumers

Employment Act of 1946  Federal fiscal planning became permanent  Goal was to achieve full employment  Promoted use of tax policy as a tool for managing the economy  Tax cuts used to spur economic growth, taxes to encourage inflation  Federal fiscal planning became permanent  Goal was to achieve full employment  Promoted use of tax policy as a tool for managing the economy  Tax cuts used to spur economic growth, taxes to encourage inflation

Problems with this policy:  Advocated, not mandated, these changes  Also did not make a clear connection to full employment and a balanced budget  The significance was that this act was a symbolic one in establishing federal responsibility for the performance of the economy  Advocated, not mandated, these changes  Also did not make a clear connection to full employment and a balanced budget  The significance was that this act was a symbolic one in establishing federal responsibility for the performance of the economy

Post-war Strikes  Cost of living went up quickly  Workers were demanding higher wages  Corporate profits doubled while real wages declined  Government kept wages where they were  This led to strikes in auto, steel, and coal industries  Businesses closed in several states  Cost of living went up quickly  Workers were demanding higher wages  Corporate profits doubled while real wages declined  Government kept wages where they were  This led to strikes in auto, steel, and coal industries  Businesses closed in several states

Truman’s response  He put the railway system under federal control  Asked Congress to give him the power to put striking workers into the army by being drafted  Also controlled the coal mines  Americans in general supported Truman, but union/labor were angry at these actions  He put the railway system under federal control  Asked Congress to give him the power to put striking workers into the army by being drafted  Also controlled the coal mines  Americans in general supported Truman, but union/labor were angry at these actions

Taft-Hartley Act  1947: rollbacks of several provisions in the 1935 NLR Act  Allowed states to pass “right of work” laws that further limited union’s operations  Restricted unions’ political power by prohibiting their use of dues for political activity  1947: rollbacks of several provisions in the 1935 NLR Act  Allowed states to pass “right of work” laws that further limited union’s operations  Restricted unions’ political power by prohibiting their use of dues for political activity

Taft-Hartley Act  President could enact an 80-day “cooling off period” in strikes that had a national impact  Truman vetoed the bill; Congress overrode his veto  President could enact an 80-day “cooling off period” in strikes that had a national impact  Truman vetoed the bill; Congress overrode his veto