hist 1302 chapter 27 notes - CHAPTER 27 THE COLD WAR AT...

CHAPTER 27:
THE COLD WAR AT HOME AND ABROAD 1946—1952
I. LAUNCHING THE GREAT BOOM
A. Introduction
1. In 1947, The Best Years of Our Lives swept seven Oscars at the Academy Awards. The
immensely popular movie dealt squarely with the problems of returning veterans,
following three veterans as they tried to readjust to civilian life.
B. Reconversion Chaos
1. Japan’s sudden surrender took the United States by surprise. Even at the rate of 25,000
discharges a day, it took a year to get all of them back to civilian life.
2. Veterans came home to shortages of food and consumer goods. High demand and short
supply meant inflationary pressure, checked temporarily by continuing the Office of Price
Administration until October 1946.
3. A wave of strikes made it hard to retool factories for civilian products. Since 1941, prices
had risen twice as fast as base wages.
4. By January 1946, some 1.3 million auto, steel, electrical, and packinghouse workers were
off the job. Strikes in these basic industries shut other factories down for lack of supplies.
C. Economic Policy
1. The economic turmoil of 1946 set the stage for two major and contradictory efforts to
deal more systematically with peacetime economic readjustment. The Employment Act
of 1946 and the Taft-Hartley Act of 1947 represented liberal and conservative approaches
to the peacetime economy.
2. The Employment Act was an effort by congressional liberals to ward off economic crisis
by fine-tuning government taxation and spending. It also established the Council of
Economic Advisors to assist the president. Even this weak legislation, putting the federal
government at the center of economic planning, would have been unthinkable a
generation earlier.
3. Total employment rose rather than fell with the end of the war, and unemployment in
1946—1948 stayed below 4 percent.
4. From the other end of the political spectrum, the Taft-Hartley Act climaxed a ten-year
effort by conservatives to reverse the gains made by organized labor in the 1930s. The act
passed in 1947 because of anger about continuing strikes.
5. For many Americans, the chief culprit was John L. Lewis, head of the United Mines
Workers, who had won good wages for coal miners with a militant policy that included
wartime walkouts.
6. In November 1946, Republicans capitalized on the problems of reconversion chaos, labor
unrest, and dissatisfaction with Truman. The GOP won control of Congress for the first
time since the election of 1928, continuing the political trend toward the right that had
been apparent since 1938.
7. The Taft-Hartley Act barred the closed shop and blocked secondary boycotts. The federal
government could postpone a strike by imposing a cooling-off period, which gave
companies time to stockpile their products.

8. Officers of national unions had to swear that they were not Communists or Communist
sympathizers, even though corporate executives had no similar obligation. The bill
passed over Truman’s veto.