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Eisenhower and the Cold War Economy

William M. McClenahan Jr. and William H. Becker

Publication Year: 2011

Throughout his two-term presidency, Dwight D. Eisenhower faced the challenge of managing a period of peacetime prosperity after more than two decades of depression, war, and postwar inflation. The essential issue he addressed was how the country would pay for the deepening Cold War and the extent to which such unprecedented peacetime commitments would affect the United States economy and its institutions. William M. McClenahan Jr. and William H. Becker explain how Eisenhower’s beliefs and his experiences as a military bureaucrat and wartime and postwar commander shaped his economic policies. They explore the macro- and microeconomic policies his administration employed to finance the Cold War while adapting Republican ideas and Eisenhower's economic principles to new domestic and foreign policy environments. They also detail how Eisenhower worked with new instruments of government policy making, such as the Council of Economic Advisors and a strengthened Federal Reserve Board. In assessing his administration's policies, the authors demonstrate that, rather than focusing overwhelmingly on international political affairs at the expense of economic issues, Eisenhower’s policies aimed to preserve and enhance the performance of the American free market system, which he believed was inextricably linked to the successful prosecution of the Cold War. While some of the decisions Eisenhower took did not follow conservative doctrine as closely as many in the Republican Party wanted, this book asserts that his approach and distrust of partisan politics led to success on many fronts and indeed maintained and buttressed the nation's domestic and international economic health. An important and original contribution, this examination of the Eisenhower administration's economic policy enriches our understanding of the history of the modern American economy, the presidency, and conservatism in the United States.

Published by: The Johns Hopkins University Press

Contents

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pp. vii-

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Preface

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pp. ix-xv

Our book challenges what many people think they know about the Eisenhower administration: that for eight years the White House was focused on military and foreign policy, while in domestic affairs it produced a “middle way” between what New Dealers and conservative Republicans advocated. This latter portrayal is not so much inaccurate as insufficient...

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Prologue: Preparing for the Presidency

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pp. 1-20

Eisenhower took office in January 1953 in a transformed world of international and domestic politics. He had spent much of the previous seven years advising President Harry S. Truman and his administration on how the military should adjust to a new international environment....

PART 1 MACRO-LEVEL ECONOMIC POLICIES

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1 Setting a Consistent Course, 1953–1956

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pp. 23-52

Eisenhower came to office determined to put a clear stamp on economic policy, one that would distinguish his Republican administration from that of his Democratic predecessors. Truman’s fiscal 1954 (July 1953– June 1954) bud get proposal called for spending an extraordinary...

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2 Economic Policy in Good Times, 1955–1957

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pp. 53-80

Good economic times challenged Eisenhower’s economic policy goals almost as much as the problems of recession had. Following the recession of 1953– 54, the economy did well. In par ticular, 1955 was the height of a boom between 1954 and 1957. In 1955, gross national...

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3 Narrowing the Course, 1957–1961

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pp. 81-110

Eisenhower addressed inflation early in his State of the Union address on January 10, 1957, days before he took the oath of office for a second time. “The principal threat,” he said, “to the functioning of a free enterprise system is inflation.” During his second term less and less...

PART 2 MICROECONOMIC POLICIES

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4 Agriculture: A Tough Battle

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pp. 113-151

Eisenhower sought to reform federal agricultural programs to reinvigorate market incentives, which had been displaced and distorted by high, inflexible congressionally mandated price supports imposed since the early 1940s. The price supports were originally designed to spur American farm production during World War II, but their rationale...

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5 A Coalescing Antitrust Policy

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pp. 152-182

When Eisenhower took office in 1953, antitrust law was not one of his immediate concerns. Nevertheless, Eisenhower, his politically attuned attorney general Herbert Brownell, and others in the administration understood the importance of antitrust. On a strictly political...

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6 Foreign Economic Policy

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pp. 183-224

When Eisenhower took office in January 1953, he set specific goals for American foreign economic policy: reinforcing the US commitment to liberal trade policies, which had slipped during the second Truman administration; increasing American private investment overseas;...

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Epilogue: The Eisenhower Legacy

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pp. 225-233

As Eisenhower’s time in office approached its end, he began to reflect on his legacy. On the economic front, there were several achievements of which he was proud. Two decades after President Herbert Hoover left the White House in the midst of the worst economic collapse...

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Acknowledgments

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pp. 235-236

We would like to acknowledge the assistance and careful reading of the manuscript by Louis Galambos, the co-editor of The Papers of Dwight David Eisenhower.1 Robert Brugger at the Johns Hopkins University Press has been a dedicated editor, and we benefited also from the comments and...

Abbreviations

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pp. 237-

Notes

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pp. 239-291

Essay on Primary Sources

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pp. 293-294

Index

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pp. 295-304


E-ISBN-13: 9781421403625
E-ISBN-10: 1421403625
Print-ISBN-13: 9781421402659
Print-ISBN-10: 1421402653

Page Count: 320
Illustrations: 2 graphs
Publication Year: 2011

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Subject Headings

  • United States -- Politics and government -- 1953-1961.
  • Cold War -- Economic aspects -- United States.
  • Eisenhower, Dwight D. -- (Dwight David), -- 1890-1969.
  • United States -- Economic policy -- 1945-1960.
  • National security -- Economic aspects -- United States.
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