One year into his presidency, Eisenhower spoke to the nation of his plans and recommendations for Congressional action: "Tax measures to stimulate consumer and business spending, strengthened old-age and unemployment insurance measures; improved agricultural programs; public works programs laid out in advance; enlarged opportunities for international trade and investment." He could also have said he was interested in frugality and balanced budgets. Eisenhower was focused on stability, not shaking up the system with a rollback Roosevelt's New Deal legislation.
US citizens were putting individual responsibility ahead of the spirit of "we're all in this together" that had influenced politics in Britain. Most voters in the United States were interested in paying little in taxes, and those who leaned conservative were looking to private charity to help the needy. Under Eisenhower and the Republican Congress there was not to be the health insurance program that had been advocated by President Truman.
Two months into the Eisenhower presidency all price controls officially ended. But there was a suggestion of government action with Eisenhower's creation of the Department of Health, Education and Welfare. And on September 1, 1954, Eisenhower signed the Social Security Amendments that he claimed enabled "some 10,000,000 more Americans to participate in the Old-Age and Survivors Insurance Program." Eisenhower also supported government construction of low-income housing, but with less spending than President Truman had been willing to provide.
Meanwhile, the GI Bill was helping education, which was helping the economy. In 1956, Eisenhower increased the minimum wage to $1.00 per hour. And there were those who were proposing an interstate highways building program, a collective interest that needed government action. Improved highways would reduce business transportation costs. Since 1954, Congress had been arguing about a transportation bill. Eisenhower had been impressed by Germany's highway system while in Europe, and in his 1956 State of the Union address Eisenhower renewed his call for a "modern, interstate highway system." Congress finally passed the Federal-Aid Highway Act on June 29. It was the largest public works project in US history to that time. (According to the Review of Economics and Statistics in 1994 it was responsible for a 31 percent annual increase of American productivity). Ninety percent of the money for building the highway system was from a federal fund built from taxes on gasoline and diesel fuel. States paid the other 10 percent.
The next challenge came in October 1957 with the Soviet Union's putting its satellite "Sputnik" into orbit around the Earth. Some in the US blamed the Eisenhower administration's failure to develop the US space program for the Soviet Union being ahead in space. Steps were taken to spend more money for space research and to provide funds to increase the study of science, and this would result in July 1958 in the creation of the National Aeronautics and Space Administration (NASA). At the same time, the administration was being criticized for an economic recession (to be known as the Eisenhower Recession) that had begun around the same time as the Sputnik launch.
The recession was normal uneven economic development: production ahead of the ability of people to consume; diminishing profits; businesses cutting back on buying goods they need to operate; investment withdrawal; unemployment and more decline in consumption. The lumber, mining, and textile industries suffered. Auto sales fell 31 percent in 1957. Five million people lost their jobs. Labor leaders complained about machines replacing workers and its effect on purchasing power (a wealth distribution problem).
But the decline was not to spiral to the great depression that Stalin had expected or that a few amateur doomsayers had been predicting. The Eisenhower administration accelerated and began construction and urban-renewal projects. Water resource programs and rural electrification were moved forward. The Eisenhower administration hastened the Defense Department's rate of procurement. Money went to the Army Corps of Engineers to build roads and other infrastructure. To encourage homebuilding the Eisenhower administration allowed no-down-payment mortgages. Congress authorized federal assistance to the states so that they could lengthen the period of unemployment benefits. The Federal Reserve lowered the discount rate to 1.75 percent. And Big Businesses were doing more than contract: Some 30,000 General Motors employees were enrolled in various training programs, and, at General Electric, veteran workers laid off because of automation were guaranteed during a retraining period at least 95 percent of their pay for as many weeks as they had years of service.
By 1959 the US economy was growing again. The upswing in growth for 1959 was at 6.9 percent. During Eisenhower's eight years in office (January 1953-61) the economy moved along with an average annual growth rate of 2.4 percent — helped by population growth (155 million to 179 million) at not quite 2 percent per year. During Eisenhower's eight years the inflation that he wanted to avoid was indeed generally low, as was unemployment. Real wages (what the money can buy) had risen. And the national debt had declined. When Truman left office the gross federal debt was down to around 71.4 percent of GDP; when Eisenhower left office it was down to 60.4 percent.
Those described as living in poverty had declined during the during Eisenhower's presidency, but this has been described as 40 million people when Eisenhower left office. Almost half of them were in the South. Poverty statistics were increasing in northern cities like Detroit, Chicago, and Cleveland — a result of farm machinery in the South replacing black laborers who were going north. (If blacks had to move, moving out of the South was a reasonable option.)
But whatever one can say about Eisenhower's successes, he had his critics among his fellow Republicans — those ideologically hostile to big government, to Roosevelt's New Deal and to high taxation. The rising star among them was Senator Barry Goldwater of Arizona. He had attacked Eisenhower's 1957 budget as "a betrayal of the people's trust" and "government by bribe." He called for people being inspired "in the way of helping themselves unimpeded by government. He spoke up for "freedom," getting government off the backs of citizens and business people, and he called the Eisenhower administration "a dime store New Deal."
Eisenhower's average approval rating (according to Gallup) was 65 percent. He left office with an approval rating of 59 percent and disapproval at 28 percent. (President Truman left office with a 56 percent disapproval rating, during the Korean War.)
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Copyright © 2018 by Frank E. Smitha. All rights reserved.