Truman and Post War Reconstruction Flashcards
What was the post-war economy like?
- The USA was the world’s dominant economy but the world economy was in disarray due to the Second World War, Britain and other nations had huge debts owed to the US (Britain owed $31 billion on war loans)
What was the Bretton-Woods system?
- A meeting in New Hampshire in July 1944 of 44 Allied nations led to the creation of the International Monetary Fund (IMF) and the World Bank (both were based in NYC).
- To join and gain support governments had to tie their monetary policy to the US dollar
What type of economics had FDR employed?
Keynesian economics
How had the New Deal affected the US economy?
FDR; had helped the US recover from the Great Depression but issues remained
What was the GI Bill?
1944, FDR- had provided: 90% mortgages, 52 weeks unemployment benefit, and loans for college education- 7.8 million vets.
What was Truman’s flagship policy?
The ‘Fair Deal’ combined liberal social policy with an economic strategy to cope with the most significant challenges such as demobilising 9 million men from the army without creating unemployment and poverty
What did the Fair Deal include?
Its 21 points included:
- Federal aid for education
- Tax cuts for the lowest earners plus increased public housing and increases in min wage (45-75 cents an hour)
- National health insurance and broader Social Security coverage
- Creation of the Department of Welfare
- Anti-lynching laws and FEPC (Fair Employment Practices Committee) made permanent
What economic successes were there during this time?
- GI Bill invested $20 billion into the economy
- ‘Baby Boom’ 1945-50 created massive economic demand
- Car sales 2.1 million in 1946- 7.9 million in 1955
- Maturing War Bonds pumped $185 million into the economy
- By 1952 industrial output had doubled nad agricultural output up by 1/3. Business investment $14 billion a year- $38 billion
- Employment was up (46 million- 61 million)
- Per capita income rose by 40%
Was there economic success overall under Truman?
The consumer boom and economic growth with record employment suggest a period of economic success
What economic failures were there during this time?
- Budget deficit
- Housing Act (1949) promised 810,00 federally subsidized new homes for low income families, by 1952 only 156,000 had been built
- Much of the fair deal did not pass through Congress, e.g., health insurance and education reform
- Prolong war in Korea (and other things) led to high inflation, which hit 25% in 1945-6
- Increasing process led to demands for increased wages and the trade unions led strikes in steelworks, rail workers and miners
What happened during the trade union led strikes?
1946- strikes involved 4.6 million workers, 116 million working days lost
- Republican Congress passed the Tast-Hartley Act to cut Union power
1952- Truman seized control of the Steel Mills as strike action loomed- lost in the Supreme Court- strike- Steel output fell by 1/3
How did Truman attempt to control prices?
Through the Office of Price Administration but this largely failed
What divisions did the Republicans create?
- Republicans took control of Congress in 1946 under the slogan ‘had enough’?
- They opposed his ‘Fair Deal’ and sought to cut taxes, restore a market economy and constrain executive power
- Truman’s policies were rejected by Congress, he voted 250 bills, 12 vetos were overridden
What divisions did the Democrats create?
- Faced a split with the Dixiecrats splitting from the party in 1948 over the liberal race policies and had a platform for ‘states rights’.
- Storm Thurmond ran for the presidency in 1948 for the Dixiecrats.
- Former VP Henry Wallace also left to form the Progressive Pary and challenge Truman
- Truman was expected to lose the Republican Dewey and the Republican Congress put aside $80,000 for the inauguration but Truman fought a determined campaign and won
-Truman could have stood again in 1952 but was deeply unpopular and so stood aside
