Cold War and The Affluent Society Notes

Cold War and The Affluent Society

Per capita income: Nearly doubles from $1,807 to $2,026.
Middle Class: Expands significantly, with 60% of Americans considered middle class.
Discretionary Income: Before the Depression, about 25% had discretionary income; by 1960, it reached 60%.
Automobile sales: Increase dramatically, from 75,000 in 1945 to 8 million in 1955.
Television Ownership: Explodes in popularity; by 1960, 75% of American households own a TV.
Galbraith's The Affluent Society highlights the economic prosperity of the era.

Factory to White Collar: Transition from manufacturing to service-oriented jobs.
- Clerical jobs grow by 25\%.
- Salaried employees in large firms grow by 60\%.
Gender Roles:
- Better-paying professions reserved for men.
- Advertising and literature promote domestic life as the norm for women.
- Esquire labels working wives a "menace" in 1954.
- 2/3 of female college students do not graduate.
- 30\% of married women are in the workforce by 1960.
Corporate Consolidation: Large firms and high-tech industries expand.
- Aided by anti-trust laws, government contracts, and infrastructure spending.
Union Growth: Wagner Act facilitates post-war union growth, reaching 17.5 million members by 1955.
Corporate Cost-Cutting: Relocation to non-union states and abroad to reduce costs.
- GE builds 61 plants abroad between 1957 and 1967.

Grows significantly:
- 13 billion in 1947
- 22 billion in 1951
- 47 billion in 1953 (half of the federal budget).
Underwrites aircraft, electronics, and other industries (especially R&D).

Annual budget: 12 billion
1 million uniformed personnel.
1/2 million civilian employees.
Supplies consist of 1.3 million items (10x larger than the largest retailer).
Legal staff handles 100K cases per year.
Landlord for 24K families.
Supervises 200+ industrial plants (copper smelters, aircraft-engine production, ammunition).
Operates 29 hospitals (18K patients/day).
Owns four oil fields.

Sell wartime factories far below cost (subsidizing industry by supplying cheap plants).
Charles Wilson (Sect. of Defense, former GM executive): “What is good for the country is good for General Motors, and vice versa.”

By the end of Eisenhower’s second term:
- 2.5 million employees.
- Spending about 97 billion/year (compared to 3.5 billion in the late 1920s).

Home Ownership:
- Before the Depression, about 40% of Americans lived in privately owned homes.
- By the mid-1960s, about 2/3 of Americans lived in privately owned homes.
Suburbanization: Vast majority of post-war construction is suburban.
Population Shift:
- Before the Depression, the majority of the U.S. population lived in cities.
- By the mid-1960s, the majority lived in suburbs.
Of all single-family homes standing in 1960, 1/4 were built in the 1950s.

Direct loans save 1 million homes from foreclosure in the early years of the Depression (1933-1936).
Government programs create and sustain a new kind of housing market, in which lending is “safe” for lenders (the government insures them) and accessible to millions of Americans previously shut out of the market.
10-20% down payment, 25-30 year repayment, low interest.
The post-war life of a New Deal program.

FHA and VA insure up to 50\% of all home loans each year in the 1940s and 1950s (and over 12 million by 1970).
FHLBB, FSLIC, FNMA, and related agencies insure and subsidize most of the remaining market, following the same “rules” about eligibility, types of dwellings, location, etc.
These programs subsidize particular kinds of construction: single-family homes in “suburban” areas (difficult, often impossible, to get loans guaranteed for apartments, duplexes, and urban projects).
People “sign-up” for VA benefits.

“I believe that 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”

Conflict facing the US “involved the fulfillment or destruction not only of this Republic but of civilization itself.”

“Affluent society” as a symbol and product of American freedoms (advertising, political speech, lived experience of new middle class).
The “Kitchen Debate” (1959).

“What freedom means to us” “[An] extraordinarily high standard of living” and “prosperity in a classless society”

Demonstrates "the superiority of modern capitalism with its ideology of political and economic freedom" (Newsweek)