American History Chapter 16 Section 1

Post-War Economy After the war, many Americans worried that as military production stopped and millions of former soldiers flooded the labor market, unemployment and recession might sweep the country.

Post-War Economy Instead, Americans who had lived with shortages during the war helped to grow the economy after the war by buying consumer goods. Demand for goods led to higher prices and inflation, triggering labor unrest and strikes in the automobile, electric steel and mining industries. President Truman tried to prevent energy shortages and railroad strikes by forcing miners and others back to work.

Republicans taking over Congress Labor unrest and inflation led to a change in leadership. In the 1946 elections, the Republicans took control of both houses of Congress.

Taft-Hartley Act To decrease the power of unions, the new Congress proposed the Taft-Hartley Act. The Taft-Hartley Act outlawed the practice of forcing employers to hire only union workers. The act of forcing a business to hire only union workers is known as a closed shop. It allowed states to pass right-to-work laws to outlaw union shops in which workers were forced to join unions.

More on the Taft-Hartley Act The law also prohibited featherbedding, or limiting output in order to create more jobs. President Truman vetoed the bill, but Congress passed the act in 1947 over his veto. Labor leaders claimed the law ended many of the gains unions made since 1933.

Election of 1952 In 1952, Dwight Eisenhower ran as the Republicans nominee for president. Eisenhower was a war hero (General of the Allied forces during World War II). Eisenhower was very popular and went by the name “Ike.” He easily won the election against Democrat Adlai Stevenson.

Dynamic Conservatism President Eisenhower believed in dynamic conservatism. This was a balance of conservative economics and social activism. The president made many conservative decisions. He chose business leaders for his cabinet and stopped government price controls.

Shortly after taking office, Eisenhower abolished the Reconstruction Finance Corporation, which, since 1932, had lent money to banks, railroads, and other institutions. Furthermore, he halted aid to businesses, schools, and public housing.

Extending Social Security Although he cut federal spending, Eisenhower continued the New Deal by extending Social Security benefits and unemployment compensation to more Americans. Additionally, Eisenhower increased the minimum wage.

Federal Highway Act Eisenhower’s programs also helped farmers and people without jobs. He pushed for public works projects. In 1956, Congress passed the Federal Highway Act, which granted $25 billion to build over 40,000 miles of interstate highways. These programs helped him win a second term in 1956.