In the 1946 midterm election, Republicans gained 55 House seats and 12 Senate seats and control of both houses of Congress ending the Depression-era, Democrat Party domination of the federal government.
The new Republican 80th Congress had campaigned on rolling back the New Deal and particularly repealing wartime rationing, which had led to widespread shortages. President Harry Truman believed in the New Deal and in the continuation of government control over the economy that had been imposed by FDR to win World War II.
An epic showdown followed. The Republicans succeeded in repealing most wartime wage and price controls and reaffirming America as a free-market economy. The resultant economic boom of the 1950s was too late to save the Republican majority in the 1948 presidential election which also saw the re-election of Truman.
There are lessons here for our day.
FDR’s last State of the Union address in 1944 had called for higher taxes on the wealthy so that the government could guarantee everyone a job, housing, education and health care. He further sought to maintain price controls on farm products and consumer goods, leaving the government in control of manufacturing even after the war was won.
Roosevelt believed that Americans, like the British, would accept government promises of security after the hardships of the war. He worried that 12 million returning GIs looking for work would cause another depression without continued government control of the economy to generate jobs and guarantee economic security.
Truman agreed. But even many Democrats in Congress did not.
Conservatives in both parties worried about the ascendancy of labor union political power and the influence of the Communist Party in the labor movement. Ronald Reagan began his conversion to conservatism battling the communists when he was president of the Screen Actors Guild. The unions overplayed their hand with post-war strikes that alienated public opinion and divided the Democratic Party coalition
Fighting corruption in government contracts during the war had brought Sen. Truman national fame. Now critics worried that peacetime government controls and contracting, absent wartime patriotism, would breed even more cronyism and corruption.
The vast debt incurred to win the war also loomed over the economy. Would the continuation of ever bigger government mean ever bigger debt?
Even in the Democrat dominated Congress of 1945, Truman’s initiatives for increasing the minimum wage and expanding government housing did not pass. His proposal for universal health care was not even considered because both Republicans and many Democrats in Congress opposed it.
Republicans campaigned on a return to free-market solutions and limited government, believing that not only was government incompetent, but that government promises of security would destroy liberty.
In the months leading to the 1946 election, government control of beef, for example, seem to prove government incompetency. Meat rationing was discontinued in December 1945, but continued price controls led to shortages of meat by the summer of 1946. Public outcry forced Truman to lift meat price controls in October – too late to affect the election.
Unlike the British, who, in 1945, had turned out Churchill’s victory government in a landslide, preferring the Labor Party’s welfare state agenda, American opinion favored scaling back big government and a return to free markets. A majority of American voters concluded that the New Deal restricted the ability of private business to create jobs.
And the majority Republicans in the 80th Congress responded.
Wartime economic bureaucracies like the Office of Price Administration were abolished. Wage and price controls were lifted. Prices for most goods shot up in the short term, but competition soon brought prices down again and introduced a flood of new consumer products for the post-war boom.
The Taft-Hartley Act was passed allowing states to enact “right to work” laws which restored a balance between labor and business.
Wartime taxes were cut. The federal budget was reduced and the massive annual wartime deficits stopped. The pieces were in place for the prosperous 1950s.
But in the kind of irony beloved by historians, Republican success in 1946 was followed by Republican defeat in 1948. It was the kind of irony that was echoed in the re-election of Bill Clinton in 1996 following the Republican landslide of 1994.
In ’48, Truman ran against the “do-nothing” 80th Congress. Republicans had done a lot, of course. They had set the stage for an economic boom, but it wouldn’t really kick in until after the election. But in acting, the Republicans had removed public fears of labor union power, high taxation, federal debt and shortages caused by government control of the economy. Republicans overplayed their political hand by appearing to take the nomination of New York Gov. Tom Dewey for president for granted. Scrappy Harry Truman whistle stopped his way into history and Republicans also lost their majorities in Congress.
As we approach the 2010 midterm election in which the Republicans look to eclipse the successes of 1948 and 1994, I hope the party leadership remembers this history. A majority of Americans want the Constitution restored, government power restricted, deficits reduced and a free market re-established. Succeed in this, and the economy will boom again. Become complacent in the success of half measures or the arrogance of assumed continued victory at the polls, and you will be defeated again.
It’s all happened before.