Post-War America: Economic Boom and the Dawn of the Cold War

The Rise of Suburban America

War Aftermath: Prosperity and Fear

Economic Recovery Under Roosevelt

• Federal war investments finally brought economic recovery.
• Debt rose from $43 billion to more than $200 billion.
• Conflict between business and labor cooled to cooperate in the war effort.
• Industrial production doubled in 1942 and continued to increase steadily.
• Full employment reached for the first time in the 20th century.

Workers’ income increased by 50%, and corporate profits doubled.

Investment continued to a large extent due to the war (Carroll and Noble, 349).

President Harry S. Truman (1945-1953)

The Cold War Emerges: Nuclear Threat

President Truman declared, “We must constitute ourselves trustees of this new force,” referring to nuclear weapons as a significant threat.

Post-War Industrialization and Economic Expansion

Secretary of Commerce Henry A. Wallace stated, “Private enterprise in the U.S. can survive only if it expands and grows.”

Key requirements for this expansion included:

• Rise of domestic consumption.
• Exports of both consumer goods and agricultural produce.

Addressing the Color Line: Executive Order 9981

Executive Order 9981 ended racial discrimination in the armed forces.

The Cold War: Global Confrontation

The USA and the USSR fought as allies during World War II. However, even before the war was over, both sides were making plans to emerge from the conflict in as powerful a position as possible. By the time of the Potsdam Conference, the former allies were already divided into two sides: the Western powers and the Soviets. The U.S. and the USSR would become the two world superpowers for almost four decades.

Neither of the two superpowers would directly fight one another, but rather used client states who fought for their beliefs on their behalf. As a consequence, serious and bloody conflicts broke out in different areas of the planet, such as Korea, Vietnam, and Afghanistan. Europe, for its part, was ruthlessly divided into two sides separated by the Iron Curtain.

Japan's Strategic Role in the Cold War

After the communist takeover in China (1949) and the invasion of South Korea (1950), Japan became strategically important as a counterbalance to "Red China." The U.S. therefore accelerated its partial political pardon and helped its economic recovery.