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Cold War At Home

Cold War At Home. Themes:. Americans had to adapt to change Fear of Communism was everywhere This had a powerful effect on domestic policy. Influences on domestic policy. Conversion to a peacetime economy Calling for black civil rights Legacy of the New Deal. Return to Depression?.

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Cold War At Home

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  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 • 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

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