Domestic Policy Flashcards
the economy in 1945-48
Economist John Maynard Keynes explained how to encourage a national economy out of recession and depression. He suggested that the government borrow money and spend it on large scale projects that stimulated industry and created jobs. Truman was sceptical of Keynesian economics but wanted to continue the liberal social programmes that has been popular before the war
Trumans domestic policy aims
To continue the liberal New Deal introduced by Roosevelt, smooth transition of the economy from war to peacetime, to ensure returning soldiers were given employment.
tensions in the economy factors
- Returning Vets
- Inflation and Labour Unions
- Strikes
- Taft-Harley Act
- Steel mills and presidential power
what did Americans fear
Americans feared another depression as 12M demobilised workers returned home.
what did Truman pass to help vets and when
In 1945, Truman passed the Employment Act to ensure full employment.
what happened to the Employment Act 1945
Congress weakened it, saying the federal government could only use practical means.
what did Truman do with Army
Truman demobilised the Army slowly. He demobilised 9M in 1945 and kept 3M in service by 1946 the army was reduced to 1.5M.
what did returning soldiers face
Most returning soldiers found employment despite Truman’s fears and many benefitted from Roosevelts’s 1944 GI Bill of Rights which give returning soldiers 52 weeks of unemployment pay and loans for education, housing, farms and business. It stimulated the economy as houses were built and 7.8M veterans out of 12M benefitted from it between 1945-55 as it distributed $20B to them. There was unemployment no doubt under Truman but they were short term and never rose higher than 5%
problems with inflation
Inflation hit 25% during 1945-6 due to the federal government’s budget deficit, the withdrawal of war-time price controls and shortages of consumer goods.
how did Truman try to combat inflation
In 1946, Truman sought to combat it through the continued use of the Roosevelt Office of Price Administration, which had controlled prices during the war.
what did Congress do to Truman’s use of the OPA
Congress sought the restoration of the free market so they weakened the OPA and prices rose dramatically. This led to tensions with employers who wanted to raise prices but keep wages low and with unions who wanted price rises to cope with the inflation.
why did strikes increase
Union power increased due to the 1935 Wagner Act which assisted the establishment of labour unions and the wartime demand for labour. In 1945, 15M workers were unionised which was around 36% of the non-agricultural workforce.
what caused widespread strikes
Employers rejected demands for pay rises, labour responded with widespread skies and in 1946, 800,000 steel workers walked out in Jan. 400,000 miners in April. Railroad workers threatened to strike in May, Truman tried to mediate with them but they were uncooperative. He then decided to conscript the railroad workers and the army run the railroads and just as he informed Congress of his intentions they called off the strikes.
how was Truman seen as an unimpressive leader in his handling of the strikes
In Nov 1946, the United Mine Workers started another strike but Truman took them to court and won. His endless battles with unions coupled with continuing inflation led many Americans to consider him to be an unimpressive leader.
when was the Taft Hartley act passed
1947
why was the taft hartley act passed
In 1946, there were 4985 strikes involving 4.6M workers and the public and congress were tired of strikes. The republican controlled congress passed the taft-hartley act to control union power
what did the Taft Hartley act say
It said that unions were liable for breach of contract and they could not insist that all workers join a union as a condition of employment. The president could order an 80 day ‘cooling off period’ before strikes. Labour was furious at this curtailment of union power and Truman had vetoed it but congress overrode it
stell mills and presidential power
Though steel profits had soared steel workers had not had a pay rise and they threatened to strike in April 1952. Stell was vital for the large quantities of weaponry required during the Korea War and so the threat was damaging. Truman seized control of the steel mills under Executive order 10340. There was much criticism and accusations that he was another Hitler and the Washington Post said it was one of the most high handed acts by any president. The owners did not want federal govt control of their mills so they appealed to the courts. The SC justices were liberal, appointed by FDR and Truman but they ruled that the president had exceeded his executive authority which humiliated Truman. The strike went ahead and lasted several months but it eventually settled on the initial terms that Truman had suggested months prior
what was Truman’s domestic policy called
Fair Deal
date of the fair deal
1949
what was the Fair Deal
In sept 1948, Truman presented a 21-point programme to congress incorporating economic and social measures
why were few of the Fair Deal get passed
Due to the conservative majority in Congress, few of the measures were never passed.
what did Truman do after he won the election
After he won the election in 1948, Truman put these proposals forward again in his Jan 1949 state of union address calling them the fair deal. He had m ore success with his proposals than before because the Democrats had taken Congress from the Republicans in the elections. However, despite this, his success was limited as congress still blocked most of his proposals
