The Political State of America in the 1950s and the Cold War Era - Essay Example

Political of America during 1950s and the Cold War Era During this period, communism-based politics replaced the domestic-based politics that were witnessed in the previous American government regimes of the1930s and 1940s. America endeavored to maintain its supremacy in the industrialized world through the prevailing economic and social impetus that shaped the political dynamics. The public during this time, was troubled about the national security and the then regime gave them assurance of democracy and continued dominion. If most citizens resisted extremism on the right during the 1950s, it implies that they subsequently rejected to cede to the most forceful thrusts that arose from the left in the 1960s (Gregory et al. 231). In her last moments in office, Eisenhower wrapped up the 1950s era and cautioned against the looming future trend and the potential risks of a military nation by saying “the conjunction of an immense military establishment and a large arms industry is new in American experience. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist” (30). This speech was made two weeks before she descended power. The economic state of America during 1950s and the Cold War Era This was an economically stable period in America in comparison with the earlier years since it was such an uneventful era. The American economy during this time did not witness significant breakthroughs or bottlenecks although gradual economic growth rippled across the land. This gave America the economic momentum to reach its peak in the early 60s. The following economic trends were observed during this era. Inflation During this era, the nation experienced inflationary conditions in the economy. An economic recession occurred in the period between 1948 and 1950. This was due to slackened Monetary supply and economic growth. The rise in Monetary supply was pretty way slower than the GNP due to the prevailing inflationary conditions. In the period 1955 and 1960, there was significant growth of GNP and consequently the monetary circulation in the economy. Between the period 1944 and 1951, the GNP grew steadily from $211 to $329 billion. This rate was, however, comparatively slower when weighed against other states like Taiwan and the nation of Japan (Vatter 124). Probably, the discrepancy in productivity gap that exists between these nations and America is due to this factor. The international balance of trade owed its origin from this period and remained negative between the periods 1950 to 1960s. The American government lost gold worth $8 billion due to the balance of trade during this period and hitherto, there has been a deficit in the economy (Vatter 264). The Federal Reserve Banks board of governors contributed to the 1950s inflation through their policies (Vatter 129). They depended on the general credit control quantitative tools such as open market operations, changes in the bank reserve ratios and the discount rate. This was in an attempt to react to the looming economic downturns and recession and restore price stability in the economy. Prices Of Commodities The prices of commodities significantly increased during this period and this contribution of many factors. One of such factors is the slackened productivity growth that was generally observed in the service sector, as a result, the elimination of price control after the World War II. Another main reason for increased prices of commodities was the Federal Reserve policy set by the Federal Reserve Bank in order to limit the American economy not to experience massive declines. The Federal Reserve Bank wanted the economy to experience only mild recessions instead. The other factor for increased commodity prices is the increased credit and demand by the consumers caused by the industrial sector’s poor productivity. Other contributing factors were the significant rise in social security taxes and indirect taxes on businesses to almost double. Government Budget Classical budget maxims were then incorporated by the government with the aim of improving departmental efficiency, reducing the size of the budget and minimizing waste. The economic growth was generally entrusted to the hands of the private investors. During this era, the expenditures by the American government on defense and military decreased after the halt of the Korean War. These funds were, however, re-channeled to social welfare programs as well as airports and highway construction grants. These steps taken by the government resulted in a significant rise in taxes in the economy and a consequential rise in the services offered by the government. Business Sector Several developments in the business sector were experienced during this era, especially financial intermediaries and capital markets. There was an increase of 27% in the housing supply and a general rise in the quality of housing in America. Americans shifted from the suburbs to urban settlements due to rise in the level of living and health condition (Barach 57). There was increased consumer credit, industrial investments, and construction. Due to these advancements in the business sector, there was a significant boom in the bond market average yield from 2.86% to 4.73% between 1950 and 1960. This led to the decline in the stock market, especially when the interest rate policy was increased by the federal government. There was also a significant rise in life insurance covers when several insurance firms entered the market to take up excess personal loans and savings from $13.6 billion to 60.1 billion in the period between 1950 and 1960. In addition to this, pension funds experienced a boom from $11 billion to $44 billion during the same period (Vatter 195). The Gross National Product Per Capita There was a growth in the GNP at the rate of 7.6% in the mid-1950s, and the growth was due to increase production in the economy. This period is reckoned to have eradicated poverty among many American citizens. The GNP per capita generally increased to almost double, and this led to a rise of 1% of the cost of living index. As a result, there was a drop of 4.1% of the unemployment level in the economy (Barach 90). During this period, there was what was termed baby boom after the World War II that led to an average of 3 million babies being added every year to the American population. This led to spending booms by the consumers due to rise in public welfare and income. Commodities that were previously viewed as luxuries such as television, fashion outfits among others luxurious commodities were now affordable by many Americans. This significantly changed the lives of workers due to the change in the industrialized America. Essentially, there was a change from production of goods to the provision of services as many citizens sought white-collar jobs such as teaching, corporate management, office employment and sales. Some companies offered the annual wage that was guaranteed while some offered employment contracts that were on long-term basis among other work-related benefits. These changes significantly undermined labor militancy to the point that fading began in class distinctions. On the other hand, farmers were hit by tough periods. There was agricultural consolidation as a result of increased productivity since farming by this time took an entrepreneurial angle. This resulted to the vacation of land by farmers, especially the family lands. During this period, southwest and west part of the nation expanded rapidly and more dwellers inhabited California that the city of New York. Plummet In American Economy In The Late 1950s In the late 1950s, there was a drastic plummet in the American economy, especially in 1958 due to fall of 14% in the industrial production, a 25% drop in the corporate profits and unforeseen 7.5% drop in unemployment (Vatter 115). John F Kennedy Life history.He assumed the presidential office in January 20th, 1961 at the age of 43 years and his regime spun to November 22nd, 1963 when he was assassinated while in Dallas streets traveling in an open motorcade. His nickname was JFK, Jack, The King of Camelot. His spouse was Jacqueline Lee Kennedy while his vice president was Lyndon B. Johnson. His strongest political challenger was Richard Nixon. He was a Democrat. Political and economic contribution and significance. During the reign of President John F Kennedy, the containment policy of America changed to the warfare-conventional nations from heavy dependence on nuclear weapons. This was driven by the quest to spread communism by having a flexible response. While he was the president, he advanced a domestic program dubbed New Frontier that assured the federal funding of the elderly medical care, rural areas economic support, education. This program also saw government intervention to stop the prevailing economic recession. He abandoned the federal death penalty and prohibited racial secernment by signing executive orders. These endeavors later on gave birth to the 1964 Civil Rights Act. He is the president that initiated the expedition project to the moon by Apollo. During his tenure, he made the international contribution by continuing to back up West Berlin after the erection of the Berlin wall by the Soviet Union. He quit the Bay of Pigs failed invasion and met Kruschev, the then Soviet Premier in the wake of the missile crisis in Cuba. He initiated American engagement in Vietnam in order to halt the spread of communism in Southeast Asia. He endeavored to reduce nuclear testing by the nations that were known as nuclear powers by signing the partial nuclear test ban treaty. He further championed the security affiliations with the nation of Israel. He undertook to muster the anticipated communism threat to encroach into Latin America by submitting aid to some nations and seeking the adherence of human rights standards. This was possible by creating the alliance for progress. He also requested the US Congress to establish the Peace Corps through which the citizens assisted the undeveloped states by volunteering in the provision of construction, farming, medical care and education. He was elected in 1960 by a historic smallest margin in terms of popular votes. His campaign slogan before the election was getting the nation moving again. Shortly before his election as the president, the nation experienced a slow economic recovery after the recession in 1958. Shortly after he assumed office, America was hit by a significantly higher unemployment rate of 6.8%. He was then advised by the council of economic advisers to combat the high rate of unemployment using the new deal style of economic expenditure. However, he remained worried about the $7 billion deficit that he viewed as indefensible come the year 1964. In 1963, the rate of unemployment dropped and remained stagnant from 6.8% to 6.0%. This was because the new frontier got engaged with foreign issues for about three years. After the ratification of the limited nuclear test ban treaty, he resorted to economic development. The elections were nearing, and he was bound to wrestle against his strongest political opponent called Barry Goldwater, who was an economically-articulate conservative. From the time he assumed the office, he did not have a good association with the business community as a result of the public dispute in 1961 with the American steel president Blough Roger. The dispute was due to an increase in prices of steel. Later on, the price increase was abandoned, but John F Kennedy suffered a blow when the American steel new plants were proposed to be transferred abroad. Later on, after experiencing successive economic blows, he initiated tax reduction that saw a reduction of corporate tax rate significantly from 52 percent to 47 percent. Lyndon B Johnson Life history.He assumed the presidential office on November 22nd, 1963 at the age of 55 years and his regime spun to January 20th, 1969 during which he never sought reelection after the two terms. His nickname was LBJ Landslide Lyndon. His spouse was Claudia Alta Eisenhower, also known as Lady Bird while his vice president was Hubert Humphrey. His strongest political challenger was Barry Goldwater. He took the oath of presidential office after about two hours after the assassination of President John F. Kennedy while in Air Force One plane. He was in the Democratic party and won by a majority vote of 22.6 percent against his political rival, Barry Goldwater. Political and economic contribution and significance. He demonstrated the quest to spread communism that was initially John F. Kennedy’s idea of having a flexible response by sending American war military personnel to South Vietnam in order to its political and territorial integrity regardless of the prevailing conditions. He incorporated businessmen, congressmen, academics, union leaders and mayors in his leadership. His vision was embodied by task forces that helped in designing programs of a benevolent regime that cared for the needy in the society. His signature was Great Society that was a legislation that entailed enactments such as Medicare, civil rights, Medicaid, public broadcasting, educational aid, poverty abolition and environmental protection. He later on presided over the moon expedition project by Apollo that was initiated by John F. Kennedy. The 1968 and 1964 civil rights acts were signed by him in order to outlaw the different forms of racial secernment. Other acts signed by him include Higher Education and Elementary and Secondary Education Act that was meant to increase educational funding to needy areas. These were also meant to offer equal opportunities in the housing sector irrespective of race and regardless of national origin or creed. He aided in the passing of the 1965 Voting Rights Act. He supported the artists and humanists by enacting National Endowment Acts for both Arts and Humanities. He battled against poverty in America by establishing programs such as Medicaid, head start, Medicare among others. On the international front, he signed the 1965 immigration act that saw the liberalization of American immigration policy to nations that are non-European. He significantly increased the nation’s participation in Vietnam from sixteen thousand war fighters to five hundred and fifty thousand troops during the year 1968. This followed a resolution at the Gulf of Tonkin to undertake such military action. The federal government debt increased by 6 percent between the time he assumed office and the time he exited. This was also marked by a 29.5 percent increase in the GDP leading to an average of 1.0 percent growth in the federal government debt annually. During his first term in office, the inflation significantly rose at a rate of 6% translating to 2.3 percent annual increase (French 45). The graphs below show the federal spending under his tenure in the office. Figure 1 Federal spending v. Revenue under the regime of Lyndon Figure 2 Surplus/Deficit under Lyndon The new deal that was established by Franklin D. Roosevelt in 1930s saw the liberals fight for policy mechanisms that would safeguard the basic economic modicum for all American citizens. This was later on implemented during his regime in 1960s as the American presicent after the assassination of his predecessor, John F. Kennedy. He also fought poverty in two levels; through long term policies and short term policies. Comparison of the contribution of President John F Kennedy and President Lyndon Johnson to America. There are significant differences that did ripple the land while the two great personalities led America. This spins from economic to immigration difference. The analyses are graphically illustrated for ease of observation. The graph below shows the comparison of the America’s GDP between John F. Kennedy and Lyndon Johnson. Figure 3 comparison of the America’s GDP between John F. Kennedy and Lyndon Johnson. Source: U.S. Presidents Comparisons Conclusion So many things took place in 1950s and during the Cold War era. The U.S. witnessed political and economc changes. For example, as indicated on the study, there was economic recession in 1948 and 1950 as a result of poor economic growth and slacked monetary supply. However, the economy increased significantly in between 1955 and 1960s as a result of changes in Gross National product, GNP. Studies indicate that there was an increase in GNP right from $211 billion to 329 billion. Nonetheless, the figure indicated was still low in comparison to some Asian countries such as Japan. Based on the study, analyst indicate that inflation was contributed by the Federal Reserve Banks board. It is explained that the economic policies drafted by Federal Reserve Banks required the economy to rely on credit control quantitative tools. Among the tools were open market operations, changes in the bank reserve ratios and the discount rate. Works Cited Bottom of Form Top of Form Bottom of Form Top of Form Top of Form Top of Form Top of Form Barach, Arnold B, and Rudolf Modley. USA and Its Economic Future. New York: Macmillan, 1964. Print. Eisenhower, D. Dwight. The Military-Industrial Complex: With an Introduction by Jesse Smith. New York: Basementia Publications, 2006. Print. French Michael. U.S. Economic History Since 1945. New York: Manchester University Press, 1997. Print. Gregory, Ross, and Richard Balkin. Cold War America, 1946 to 1990. New York: Facts On File, Inc, 2003. Print. The U.S. Presidents comprisons (n.d.). web. Vatter, Harold G. The U.s. Economy in the 1950s: An Economic History. New York: Norton, 1963. Print. Top of Form Bottom of Form Read More