MR. LIPMAN’S APUS POWERPOINT CHAPTER 36

Post WWII Cold War and Economic Prosperity

Keys to the Chapter – Part I

• Taft-Hartley bill slows down union growth• GI Bill increases education• Government encourages migration to suburbs• Spheres of Influence and Satellite States

• Cold War Begins• The Long Telegram and George Kennan• The Domino Effect

Keys to the Chapter-Part II• NATO• Peace time draft and Large Military Spending• Marshall Plan• Collapse of Nationalist China• Nuclear Weapon Race• HUAC and the “search for communists”• NSC 68• Korean Conflict

• 1946 – 1947 –fear return of Great Depression – GNP slumped (aka GDP)– Prices rose by 33% when price controls lifted – Strikes start because lowered purchasing power

–Taft-Hartley Bill reduces power of union labor• Outlawed “Closed” union shops• States allowed “right to work laws” outlawing unions• President can get injunctions if strike threatens

national health or safety of the nation

• GI Bill of Rights (GI Bill) passed to avoid unemployment:– Generous provisions to send them to school – VA guaranteed loans for homes, farms, businesses – Powerful cause of the long postwar economic boom

POST WAR ECONOMIC BOOM BEGINS IN 1948-49-Middle Class will grow-Home ownership will grow-Ownership of Modern appliances and cars will grow-% of women in workplace will grow to over 50% by 1995

• Huge military budgets = “permanent war economy” – The economy depends on this $ to avoid recessions

– Military dollars funded high-technology industries (aerospace, plastics, electronics)

– Military contractors grow quickly in “Sunbelt” states and thus so does population and employment (Federal $)

Productivity Gains are large from 1950-1980Energy is Cheap from 1950s to 1970sFarm employment drops but productivity of farms increases

The American Farmer, 1940–1993

Population Increase, 1950–2000The Growth of the Sunbelt

Growth of the Suburbs 1940-60/ and White Flight Begins

• Move to suburbs encouraged by government policies – (FHA) and (VA) loans made it cheaper to own a home in

the suburbs than rent an apartment in the city – Tax deductions given for interest payments on mortgages – Government-built freeways pave way for commuting

• The construction industry benefited suburbs: – Famous builders were Levitt brothers, who built the first

“Levittown” on Long Island in the 1940s and then in N.J.

• The effects of this boom on US society (1946-64)– Elementary-school enrollments up in late 1960s then declined – Businesses sold their parents baby food and baby products – In the 1960s teenagers consumed rock music and clothing – In the 1980s, they competed with each other for jobs– In the 1990s, they enter middle age and less children are born– In the 21st century burden begins on Social Security system

BIRTH RATES DOWN IN AMERICA SINCE 1964 BUT IMMIGRATION HAS GROWN THUS OUR POPULATION CONTINUES TO GROW

• February 1945 – Big Three at Yalta – Defeat Germany and assign occupation zones

– Stalin agreed to democratic elections and a representative government for Poland and rest of Eastern Europe (He lies)

– Plans made for United Nations

– USSR agrees to attack Japan W/I 90 days of Germany’s surrender in exchange for land

America and USSR: Why Cold War developedStalin wanted security for USSR

• USSR had been invaded 2 times from west (WWI and WWII)

• Demanded friendly governments (“sphere of influence”) along border

US DID NOT TRUST STALIN

• Communist call for world revolution

• 1944 – Bretton Woods (NH) agreements– America’s currency will eventually replace gold

– US led way in forming (and funding) institutions to create more open world for trade after the war • International Monetary Fund (IMF) – Promote world trade by regulating currency

exchange rates

• World Bank – Promote growth in areas hurt by war or

underdevelopment through loans and financial aid

First Meeting of United Nations: April 1945

• Early UN successes– Helped establish Jewish state of Israel in Palestine

– Helped some former colonies to independence

UN’s biggest initial failure was inability to agree to ban nuclear weapons (Russia wants it but US says no since at that time we are only one with it)

The UN Holds Its First Session: Everyone’s a cheater

• Allies disagreed on what to do with Germany – Soviets wanted reparations to pay for brutal war

– US knows strong German economy essential to rebuilding Europe

– Germany divided into 4 zones at end of war among France, Britain, US, USSR

– US wanted reunited Germany; USSR refused

Postwar Partition of Germany

• The Berlin airlift started in 1948 when USSR cuts off access to Berlin from rest of Germany

– USSR believed it could starve Allies out of Berlin

– June 1948 – May 1949 – US airlifted supplies

– Blockade lifted when USSR saw US would support its allies

1949 Russia will form East Germany as its satellite and also develops Atomic bomb.

• Satellite states in E. Europe turn communist– Soviet forces occupied Eastern Europe after WWII

– March 1946 – Churchill at speech in Missouri

• Churchill declared: “An iron curtain has descended across the continent” • Churchill called for Europe to unite to

stop communism

• Containment theory devised by George F. Kennan in a 1947 telegram from Moscow

– Russia was relentlessly expansionist, but cautious

– America needs “firm and vigilant containment” at every opportunity (“avoid the Domino Effect”)

– First major test in Greece where Britain can no longer afford to support government against the communist rebels supported by Stalin

• The Truman Doctrine (March 1947)– Requested $400 million to support Greece and

Turkey – “it must be the policy of the United States to

support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures”

• Critics of say he overreacted by promising to help every small insignificant country– Divided world into pro-US or pro-Soviet camps

• The Marshall Plan – June 5, 1947 – Secretary of State proposed that if

European nations would work out a joint plan, US would provide financial assistance

– Fear of Communism makes Congress approve plan after initial reluctance

– USSR refused offered aid (with strings attached) and denounced Plan• None of USSR’s satellites allowed to participate

• Success of the Marshall Plan – Revived Europe’s economy – Prevented takeover by Communist parties– Increased US prosperity because of increased

exports to Europe

• Failure of Marshall Plan – Deepened divide between non-Communist West

and Communist East

• North Atlantic Treaty Organization (NATO): 1949– US decided to join thus breaking tradition followed since

Washington of no “foreign entanglements”

– 10 European nations, US and Canada • Greece, Turkey, West Germany added in 1950s

– Pledge to regard an attack on one as an attack on all

– Will become cornerstone of US Policy in Europe

REBUILDING OF JAPAN MUCH EASIER SINCE USA ALONE CONTROLLED COUNTRY

• 1949 – Truman ordered development of the H-bomb (hydrogen bomb) after Russia develops A Bomb

– 1,000 times more powerful than atomic bomb

– Opposed by prominent scientists

– Start of prolonged arms race that jeopardized entire world• 1952 – US explodes first H-bomb • Followed by USSR in 1953

• About 150 people were prosecuted under the Smith Act, passed in 1940, outlawing the advocating of violent overthrow of government, & convictions upheld by the Supreme Court - Dennis v. United States (1951)

• House Committee on Un-American Activities (HUAC) investigates “subversive” activities – Alger Hiss, a member of the State Department and

“eastern establishment”

– Hiss suspected of espionage

– In 1950, Hiss was convicted of perjury (lying under oath), still not clear whether he spied for the Russians

– Hiss was not prosecuted for espionage because the statute of limitations had run out

– Nixon will “make his name” with this committee

• Julius and Ethel Rosenberg accused of spying for the Russians, allowing them to develop the bomb early

– The Rosenbergs were convicted in 1951 and executed 1953

At the time, some Americans believed they were innocent (evidence has now come out that demonstrates their guilt)

– After this incident, some in the US began to believe that the US had gone too far in its hunt for communists

• Truman’s nomination split the Democrats in 48 race:

– 13 southern states (who opposed Truman because of his support for black civil rights) nominated Strom Thurmond (governor of South Carolina); known as States’ Rights Democrats or “Dixiecrats”

– Liberal Democrats (angry because of Truman’s hard-line position on Russia) nominated former vice president Henry A. Wallace; supporters included pacifists, communists, and liberals

– Republicans nominate Thomas Dewey from NY who looks like a sure winner given split of Democrats

Truman wins in Surprise by campaigning hard arguing Republican congress was “do nothing”

• Korea after WWII – 1945 – USSR accepted Japanese surrender north

of 38th parallel; US did same south of 38th parallel

– Both claimed they wanted to reunite Korea

• 1950 – Secretary of State Dean Acheson said Korea was outside of essential US defense perimeter – (leads Russia to believe US would not risk war if

North invaded the South – They were wrong)

North invades South in June 1950 and gains land quickly

• Effects of the Korean War on US foreign policy – Massive military buildup begins which otherwise

would not have been possible

• Spring 1950 – NSC-68 recommended buildup, but initially scrapped as politically impossible and expensive– “Korea saved us” – Dean Acheson – UN condemns North Korea as aggressor:

Russia is boycotting the security council following America’s recognizing Taiwan as true China

– Officially Korea was a “police action” under UN

– September 15, 1950 – MacArthur launches amphibious assault at Inchon

– China warns US not to approach river dividing Korea from China but MacArthur ignores them• Chinese troops cross river driving US back to 38th parallel

• MacArthur attacks Truman publicly – Upset being asked to fight a limited war

• April 11, 1951 – Truman removes MacArthur

MacArthur’s Ticker Tape Parade in 1951

Stalemate at the 38th Parallel

----------------Conflict ends

where it began 3

years earlier