• US government convinced sharp swings in business cycles could be manipulated through monetary and fiscal policy

• Reconversion to peacetime economy

• Economic boom due to pent-up demand and forced wartime savings

• GI Bill of Rights – education and business

• Taxes cut and price controls removed - Inflation and labor unrest led to Republican control of Congress

• Taft-Hartley Act – passed over Truman veto – outlawed the closed shop and allowed presidential injunctions to prevent strikes that endangered national interests

• Act hampered unionizing of new industries but not existing unions

• Stalin continued to expand Soviet domination in Europe and Asia

• US demobilized (6.5 million to 1.5 million) but Russia maintained huge army

• Foreign officers warned against Russian aggression

• The Sources of Soviet Conduct by George Kennan called for West to contain USSR

• Truman saw bomb as counterweight to Soviet power

• Many scientists against use of bomb (Oppenheimer) – Truman doubted people would permit its use again

• Proposed deal whereby UN would monitor nations to ensure no bombs made – US would destroy stockpile

• USSR refused

• Communist guerrillas waged war against Greek monarchy

• Britain warned US they would cut off aid to Greece

• Truman asked Congress for $400 million in aid for Greece and Turkey to fight communism

• Using aid to fight communism = Truman Doctrine

• 1947 Sec. State George C. Marshall proposed US financed reconstruction of Europe – would even allow $ to Soviet Union and satellites

• Europeans set up committee calling for $22.4 billion

• Stalin afraid $ would draw satellites into US orbit – would not participate

Hey Guys! I have a great

plan!

• By 1951 Europe booming• Europe now divided into communist

east and democratic west• West announced plans to create a

new democratic West Germany• Russia responded with Berlin

Blockade• US and West responded with Berlin

Airlift

• US occupied Japan and did not allow USSR a role in China

• General MacArthur - military governor of Japan – helped create stable, prosperous state

• US attempted to broker agreement between Nationalists under Chiang Kai-shek and Mao Zedong

• 1947 - Civil war erupted in China

• Truman’s popularity low• Republican nominee Governor Dewey• Southern Democrats left party over

civil rights plank• Formed “Dixiecrat” party and

nominated Strom Thurmond• Liberals organized a new progressive

party and nominated former VP Wallace

• Truman launched an aggressive whistle-stop campaign• Truman warned Republicans would do away with New

Deal gains• Success of Berlin Airlift also strengthened Truman• Progressive party fell into hands of communist

sympathizers driving away many liberals

• Dewey’s campaign was smug and lackluster – expected to win without effort

• Truman won the election and attempted to enact a Fair Deal – little of which was passed

• North Atlantic Treaty Organization (NATO) formed to counter Soviet threat to Europe

• 1949 – USSR detonated an atomic weapon – caused US to expand its arsenal

• 1950 – US begins development of hydrogen bomb (USSR already developing)

• By 1949 mainland China in communist hands

• Chiang Kai-shek and Nationalists fled to Formosa (Taiwan)

• Containment relied on money but not men on the ground – Truman began to reduce number of troops

• NSC – 68Submitted by Secretary of State Dean AchesonCalled for enormous increase in military spending (350%

increase)Create an arms race that the USSR could not hope to win due

to inferior systemTruman not warm to idea but later changed mind due to war in

Korea

• Japanese disarmed in north Korea by USSR and the US in the south

• USSR established a communist government in the north w/a well-armed army – South Korean army small and ill-trained

• US policy makers determined that military involvement in Asia was impractical – US defense perimeter to be based on Japan and Philippines

• Korea excluded from perimeter in speech by Sec State Acheson in 1950

• North Korea responded with an attack on South Korea

• Truman resolved to “stop the S.O.B.’s”

• US planes and ground troops were sent to help without a declaration of war

• Truman accepted NSC-68

• US secured UN Security Council approval for defense of South Korea (USSR?)

• General MacArthur placed in command

• 16 nations supplied troops though US forces comprised about 90% of the force

• Pusan Perimeter• Inchon Invasion

• North Korea retreated to well above 38th parallel

• Some advised Truman to stop at parallel – not to entice USSR or China to widen war

• MacArthur sought full occupation of North Korea

• Truman authorized the stop line at the Yalu River

• Chinese “volunteers” began to turn up in hauls of POWs

• MacArthur assured Truman China would not dare intervene

• Communist China entered war with over 250,000 troops

• UN forces pushed back to 38th parallel

• MacArthur urged the use of atomic weapons and naval blockade of China

• Truman – afraid of starting WWIII- fired MacArthur

• Korean War became unpopular due to mounting casualties and costs

• Truce negotiations began in 1951 but war would drag on until 1953

• Korean War illustrated growing US decline in ability to influence world affairs

• Fear of communist espionage in US increased

• Truman set up Loyalty Review Board to check on government employees – about 2,700 workers fired over 10 year period

• Whittaker Chambers (Time) versus Alger Hiss (former state department official)

• Case fed fears of communist underground

• Klaus Fuchs – British scientist• Harry Gold – associate of Fuchs• Julius and Ethel Rosenberg• Venona Papers

• 1950 – Joseph McCarthy (Wisconsin) claimed he had list of 205 communists in the State Department

• No evidence to back up his claims

• Backed by public opinion (Red Scare) McCarthy attacked several public figures including George Marshall

• The “Big Lie” – enormity of charges and status of targets must mean there was truth

• Truman low in polls again due to Korean War, firing of MacArthur, and charges made by McCarthy

• Republicans nominated Eisenhower• Eisenhower promised to go to

Korea• “I Like Ike”• Democrats nominated Governor

Adlai Stevenson

• Stevenson tagged as an “egghead”

• Eisenhower attempted to emulate Washington and remain above partisan politics

• Fiscal conservative

• Dulles argued against containment using military forces – believed nuclear arsenal sufficient

• Beliefs tested on Korea – nukes sent to Asia along with vague warnings of “tougher measures”

• Weeks later armistice in Korea signed

• China unaware?

• 1954 - Communist China shelled two islands manned by Nationalist Chinese troops

• Chiang Kai-shek appealed to US for help

• 1955 – Eisenhower announced that US willing to use nuclear weapons to defend the islands

• China backed down

• McCarthy continued attacks on the State Department

• Overreached when he began attacks on the army

• Televised Army-McCarthy hearings brought about his downfall

• His combativeness and disregard for human values became apparent and he lost public favor

• McCarthy was censured by the Senate and became inconsequential – died of cirrhosis of liver 1957

Have you no sense of decency, sir, at

long last? Have you left no sense of

decency?

• Trouble erupted in French Indochina in 1953

• USSR & China supplied Viet Minh with arms

• Truman countered with supplies to French – Eisenhower continued policy

• 1954 – Battle of Dien Bien Phu• UN divided Vietnam at 17th parallel

– two Vietnams, North and South, createdCe vraiment

aspire

• Democratic Republic of Vietnam – North - (communist) under Ho Chi Minh

• Republic of Vietnam – South – under Bao Dai

• Elections scheduled for 1956• Bao Dai overthrown by Ngo Dinh

Diem• US supported Diem• Establishment of Southeast Asia

Treaty Organization (SEATO)

Ngo Dinh Diem

• Jewish immigration into Palestine• Zionism• 1947 – UN partition of Palestine• 1948 – Establishment of Israel• Eisenhower – policy of

moderation• 1952 – Egyptian revolution

deposes King Farouk – Gamal Abdel Nasser takes control

• US prepared to give Egypt $ for Aswan Dam but no arms

• Egypt leaned towards USSR• Eisenhower revoked offer –

Nasser nationalized Suez Canal

• British, French, and Israeli forces seized canal (Suez Crisis)

• US calls for ceasefire in UN – vetoed by Britain and France• USSR (Khrushchev) threatened to send troops and fire missiles

against Britain and France• British, French, and Israeli troops withdrew• Eisenhower issued the Eisenhower Doctrine – US prepared to

use force against any communist aggression (restatement of containment policy)

• Eisenhower won reelection in 1956• Cold War continued • Khrushchev came to power in

USSR upon death of Stalin• De-Stalinized Russia• Crude, temper tantrums, bellicose • US advantages evaporated with

launch of Sputnik 1957

• US bomber advantage obsolete – Russian ICBMs new threat

• Khrushchev boasted USSR could destroy US

• The “Missile Gap”• Threat of nuclear war caused more

accommodation between US and USSR

• Mutual visits – Nixon’s kitchen debate / Disneyland

• A planned conference between US and USSR halted due to U-2 incident

• Eisenhower accepted responsibility

• Khrushchev turning out nuclear missiles like “sausages from an automatic machine”

• 1947 – Organization of American States (OAS) established (US had no veto power)

• Latin American radicals protested US support for dictators and lack of financial aid for poor

• 1954 – US supported invasion of Guatemala by Honduras due to Soviet influence

• 1958 – Nixon’s motorcade attacked in Goodwill Tour of Latin America – forced to abandon trip

• 1959 – Cuban Revolution• Castro nationalized American

businesses and negotiated trade agreement with USSR

• Eisenhower broke off diplomatic relations with Cuba

• Ideological competition with communism caused many to question current attitudes of racial equality

• American racism hurt America’s cause in Asia and Africa

• Coincided with crackdown on communists in America

• 1950 Internal Security Act (McCarran Act)

• Oppenheimer lost security clearance

• Military desegregated• Desegregation of colleges began in

1938 under Supreme Court rulings• 1954 – Brown v. Board of

Education of Topeka – Thurgood Marshall argued against “separate but equal”

• The court ruled all schools must desegregate “with all deliberate speed”

• Few schools complied – where they did riots erupted

• Eisenhower did little to enforce the ruling

• 1957 – Little Rock – Governor Faubus called out National Guard to prevent blacks from attending white school

• Eisenhower called in army troops and nationalized the National Guard to allow black students to attend

• Southern resistance only strengthened black and sympathetic white resolve

• Civil Rights Act of 1957 – allowed attorney general to obtain injunctions to stop officials from interfering with Black voters

• Law also established Civil Rights Commission

• Enforcement of the law was spotty

• Kennedy versus Nixon• Issue of Catholicism• Both were cold warriors – JFK even

admitted he liked McCarthy• Television debates – power of the

media• Kennedy’s victory in popular vote

was razor thin