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Cold War Begins. Chapter 36. Postwar Economic Anxieties. Significant fear that US would return to Depression following War Saved money during WWII, now wanted to spend Caused inflation Not enough supply

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Cold War Begins

Chapter 36


Postwar Economic Anxieties

  • Significant fear that US would return to Depression following War
  • Saved money during WWII, now wanted to spend
    • Caused inflation
    • Not enough supply
  • Strikes happened following war as unions tried to get better wages in response to inflation
  • Taft Hartley Act
    • Makes closed shops illegal
      • Must be in a union to work in a closed shop
    • Weakened unions
  • Opposition to Unions
    • Struggle to unionize workers in South and West
    • Service sector jobs were difficult to unionize
  • Democratic attempts to slow economic downturn
    • Sold government installations to private investors
    • GI Bill (Servicemen’s Adjustment Act) 1944
      • Made it easier to have soldiers go to school, vocational training and homes
      • Kept soldiers out of workforce and encouraged construction industry

Long Economic Boom 1950-1970

  • America grew continuously from 1950-1970
    • Created social mobility and allowed for development of social welfare programs and civil rights movement
  • Television and Rock n Roll and increased materialistic culture developed
    • Larger homes, multiple cars, vacations, washing machines etc.
  • Large amounts of jobs became available for women
    • Created tension between career and home
  • Reasons for prosperity
    • US was only nation with factories intact;
    • Economy’s foundation was military spending
      • First WWII then Korean War
      • Military funded and incentivized high tech industries
    • America and Europe controlled oil production from Middle East
    • Increased productivity from education and efficiency
    • Labor shifted away from Agricultural to Industrial
  • Highway Act (1956) created interstate Highway system

Sunbelt and Suburbs

  • Population became very fluid – people moved frequently and over great distances
    • Weakened traditional family structures
    • Sunbelt grew fastest – area from Southwest through old South and Florida
      • Grew because of good climate, military, technological industries
    • Old industrial areas in Northeast (Frost Belt) and Midwest (Rust Belt) suffered shrinking populations
    • Demographic and economic shift also resulted in political power shift away from North
  • Suburbs were made possible from cheap loans from Federal Housing Administration (FHA) and Veterans Administration (VA) as well as new highways
  • Levittown – suburban tract homes built to increase efficiency and decrease cost
  • White Flight – whites left cities for suburbs – some neighborhoods were redlined to insure blacks or Jews could not move in
  • Baby Boom (1945-1960)
    • Extended period of high birth rates
    • Results in demographic “bubble” through different industries

Yalta Conference

  • Discuss plans for the post war world in February 1945
    • agree to establish peacekeeping forces
    • discuss governments of east Europe
    • Soviets will declare war on Japan when Nazis are defeated
      • Soviets got land, trade concessions and control over trade in parts of China
    • Laid plans for United Nations
  • Stalin broke most of his pledges regarding governments of east Europe
  • Yalta intended as a beginning understanding between Soviets and US
  • US-Soviet Tensions
    • US did not share atomic information with Soviets
    • Conflict over who and how Europe would control Europe
    • Bretton Woods (1944) established International Monetary Fund (IMF) and the World Bank to help development of Third World – Soviets refuse to participate
  • United Nations
    • Created in San Francisco in 1945 – established international governing body that institutionalized political dominance of allied powers in security council


  • Nuremberg Trials held German leaders responsible for WWII and Holocaust
    • Many were jailed or executed for crimes against humanity
  • Soviets resisted any attempt to rebuild Germany; US supported it to create an ally against Soviets
    • Germany was divided into 4 occupation zones
  • Churchill says political division between USSR and Western Europe is like an Iron Curtain
    • Cold War Speech
  • Long Telegram
    • George Kennan, American diplomat stated that USSR intended to expand and US had to contain the spread with force or the threat of force
    • Must consistently be resisted everywhere
  • Truman Doctrine
    • US would support “free people resisting subjugation”
    • Led to US interfering with Soviets in Greece and Turkey
    • Resulted in US support of many leaders/groups claiming to resist communism
  • Berlin Airlift (1948)
    • Soviets tried to force Allies from Berlin by blockading it; Truman sent supplies by air until USSR backed down


  • Long Telegram and Truman Doctrine led to policy of containment outlined in NSC-68
    • Established commitment to large peace time military
    • Policy to aggressively limit communism to areas where they already were and prevent its expansion

Marshall Plan

  • Provided food and money to rebuild Europe
    • Attempt to avoid economic crisis similar to post World War I
    • Try to prevent attractiveness of communism
    • Offered to East Europe in effort to take them away from Stalin
    • Soviet led coup in Czechoslovakia encouraged Congressional support for plan
  • National Security Act (1947)
    • Department of Defense located at Pentagon
    • National Security Council (NSC) to advise president on security
    • Central Intelligence Agency (CIA) to gather facts
    • Voice of America – began transmitting American propaganda

America Rearms

  • NATO – North Atlantic Treaty Organization
    • Signed April 4, 1949
    • Member nations pledge to support each other if attacked
    • Helped unify Europe and led to Arms Race
  • Reconstruction in Japan
    • Gen Douglas MacArthur took responsibility for governance of Japan
    • Japan cooperated and democratized quickly to end occupation earlier
  • Civil War in China
    • Jiang Jieshi (Chiang Kai Shek) led Nationalists against Mao Tse Tung of the Communists
    • Communists win and Nationalists retreated to Taiwan
  • Soviets become atomic power
    • 1949 Soviets develop atomic bomb with the help from Julius and Ethel Rosenberg –American spies for Soviets
    • US responded by building H-Bomb 1952; Soviets get one in 1953

Red Scare

  • Loyalty Review Board (1947) investigated federal employees to determine if they were communists
  • Dennis v. US (1951) Supreme Court upheld convictions of communists under the Smith Act (1940) for advocating overthrow of government.
  • HUAC – House Committee on Un-American Activities
    • Searched for communist influences in US
    • Blacklists – actors, etc had careers ruined
    • Alger Hiss Case
      • Led by Richard Nixon, he convicted Hiss, of being a spy
      • Was a famous case – Nixon used “pumpkin papers” to convict him
      • Established Nixon as major national figure
  • Local anti-communist efforts
    • Feared communism led to changes in social values
    • Took books from libraries and textbooks because of communist themes
  • Hunt for communism turned into a witch hunt and some began to resist its efforts


  • Joe McCarthy
    • Claimed hundreds of communists
    • never proved anything
  • McCarthyism means accusing someone of disloyalty without evidence

Election of 1948

  • Democrat candidates
    • Harry Truman – campaigned nationwide with “give ‘em hell” speeches against Congress
    • Dixiecrats – Strom Thurmond
      • Southern Democrats who opposed desegregationand favored States’ Rights
    • Henry Wallace - Progressive Party
      • Opposed Truman’s policies against USSR but was seen as too soft on communism
  • Republicans
    • Thomas Dewey of New York
  • Truman wins the election on strength of blacks, farmers and workers
    • Truman wanted to send aid to poor countries to helpprevent them becoming communist
  • Truman’s Fair deal
    • Created jobs
    • Ended job discrimination
    • Built public housing
    • Was opposed by Republicans and Dixiecrats
  • 22nd Amendment (1947)
    • Limits President to 2 terms

Conflict in Korea “Forgotten War”

  • US and Soviets divide Korea after WWII on 38th Parallel
  • Korean War
    • June 1950- Communist North with Soviet equipment invaded South in attempt to reunite Korea and took almost entire peninsula to Pusan
    • NSC 68 was put into effect, increasing size of military
    • United Nations, led by US, join war to stop North – officially it was a “police action” without Congressional Approval
    • Douglas MacArthur came from Japan to lead US forces
      • September 1950 Launched surprise attack at Inchon and forced North Koreans to the Yalu River (border with China)
    • November 1950 China joins to stop UN and pushes US forces back
  • MacArthur wanted US to attack China; even use nukes on Chinese/Korean border
    • Did not listen to President Truman
  • Truman fired MacArthur
  • Truce agreed to in 1953 reestablishing 38th parallel border
    • DMZ (demilitarized zone) created between two nations