The Cold War at Home

1. Cold War At
Home

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

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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. Taft-Hartley Act
 1947: rollbacks of several
provisions in the 1935 NLR Act
(Wagner 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

12. 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
 “Slave-Labor Bill”
 Truman”dangerous intrusion
on free speech.”