25. DDE to James Vincent Forrestal, September 27, 1948, Papers, 10:230–234.
26. Diary, December 17, 1948, Papers, 10:369–371; DDE to James Vincent Forrestal, December 21, 1948, Papers, 10:379–386.
27. Diary, January 7, 1949, Papers, 10:398–400.
28. See Raymond J. Saulnier, “Recollections of a 1948 Visit with General Eisenhower,” Presidential Studies Quarterly 24, no. 4 (Fall 1994): 865–867.
29. DDE to Arthur Hays Sulzberger, December 29, 1950, Papers, 11:1505.
30. DDE to James Wesley Gallagher, December 30, 1950, Papers, 11:1511.
31. Diary, January 1, 1951, Papers, 12:5–8.
32. DDE to William Averell Harriman (hereafter WAH), February 24, 1951, Papers, 12:64–67. Also see DDE to Harry S. Truman, February 24, 1951, Papers, 12:67–68, and DDE to Marshall, March 12, 1951, Papers, 12:117–121.
33. Diary, March 2, 1951, Papers, 12:83–84.
34. DDE to WAH, March 2, 1951, Papers, 12:88–90.
35. Unfortunately, there were still a few bad apples in the barrel. See DDE to Omar Nelson Bradley, March 30, 1951, Papers, 12:166–170.
36. DDE to WAH, April 20, 1951, Papers, 12:222–227.
37. Ibid.
38. See esp. DDE to Bernard Law Montgomery, April 24, 1951, Papers, 12:243–244; DDE to Omar Nelson Bradley, April 28, 1951, Papers, 12:248–249; DDE to WAH, May 4, 1951, Papers, 12:262–266; DDE to WAH, June 1, 1951, Papers, 12:315–319; DDE to WAH, June 7, 1951, Papers, 12:333–335; Diary, June 11, 1951, Papers, 12:340–342; DDE to WAH, June 12, 1951, Papers, 12:344–349.
39. Diary, June 11, 1951, Papers, 12:340. Also see DDE to WAH, June 30, 1951, Papers, 12:397–399.
40. The word “us” is actually underlined twice. Diary, July 2, 1951, Papers, 12:399–400.
41. DDE to Marshall, August 3, 1951, Papers, 12:457–463.
42. DDE to Paul Van Zeeland, September 11, 1951, Papers, 12:531–532.
43. DDE to Joint Chiefs of Staff, October 3, 1951, Papers, 12:592–595; DDE to Joseph Lawton Collins, December 20, 1951, Papers, 12:803–806. Also see DDE to Omar Nelson Bradley, October 31, 1951, Papers, 12:678–80, for Ike’s efforts to obtain equipment.
44. DDE to Alfred Maximilian Gruenther, October 22, 1951, Papers, 12:661–665.
45. See, for instance, Diary, October 10, 1951, Papers, 12:629–630.
46. DDE to William Morrow Fechteler, December 10, 1951, Papers, 12:769–772. Also see DDE to Robert Abercrombie Lovett (hereafter RAL), December 13, 1951, Papers, 12:779–785.
47. Compare DDE to WAH, December 14, 1951, Papers, 12:788–790; Diary, December 15, 1951, Papers, 12:792–793; and DDE to RAL, December 19, 1951, Papers, 12:800–806.
48. Diary, December 21, 1951, Papers, 12:809–811.
49. DDE to RAL, January 2, 1952, Papers, 12:831–833. Also see DDE to Harry S. Truman, January 4, 1952, Papers, 12:839–843.
50. DDE to LDBC, December 27, 1951, Papers, 12:817–818.
51. DDE to Milton Stover Eisenhower, May 30, 1951, Papers, 12:304–306.
52. DDE to George Whitney, June 14, 1951, Papers, 12:351–353.
53. DDE to DeWitt Wallace, July 21, 1951, Papers, 12:430–431.
54. Diary, June 4, 1951, Papers, 12:321. For a different analysis and more detailed treatment of Eisenhower’s decision to make a run for the presidency, see William B. Pickett, Eisenhower Decides to Run: Presidential Politics and Cold War Strategy (Chicago: Ivan R. Dee, 2000). See also Michael J. Birkner, “ ‘He’s My Man’: Sherman Adams and New Hampshire’s Role in the ‘Draft Eisenhower’ Movement,” Historical New Hampshire 58 (2003): 5–25, and Douglass K. Daniel, “They Liked Ike: Pro-Eisenhower Publishers and His Decision to Run for President,” Journalism and Mass Communication Quarterly 77, no. 2 (Summer 2000): 193–404.
55. Diary, June 5, 1951, Papers, 12:329.
56. DDE to George Whitney, June 14, 1951, Papers, 12:351–353.
57. DDE to Martin Withington Clement, July 21, 1951, Papers, 12:431.
58. DDE to Milton Stover Eisenhower, September 4, 1951, Papers, 12:520.
59. DDE to LDBC, September 27, 1951, Papers, 12:580–581.
60. DDE to RAL, May 28, 1952, Papers, 13:1238.
61. DDE to Harry S. Truman, April 2, 1952, Papers, 13:1154–1159.
62. Ibid.
63. DDE to LDBC, December 19, 1951, Papers, 12:798–800.
64. Ibid. Also see DDE to Sid Williams Richardson, December 26, 1951, Papers, 12:813–815.
65. DDE to George Arthur Sloan, January 29, 1952, Papers, 13:928–932; DDE to Clifford Roberts, February 9, 1952, Papers, 13:957–959; DDE to George Arthur Sloan, October 29, 1952, Papers 13:1404–1405.
66. See DDE to Milton Stover Eisenhower, June 10, 1952, Papers 13:1242.
67. For details on the political maneuvering at the Chicago Republican convention, see Jean Edward Smith, Eisenhower in War and Peace (New York: Random House, 2012), 516–519.
Ten. Pursuing Prosperity
1. Robert E. Baldwin, “The Changing Nature of U.S. Trade Policy Since World War II,” in The Structure and Evolution of Recent U.S. Trade Policy, ed. Robert E. Baldwin and Anne O. Krueger (Chicago: University of Chicago Press, 1984), 5–32; Douglas A. Irwin, “The GATT in Historical Perspective,” American Economic Review 85 (May 1995): 323–328. Devesh Kapur et al., The World Bank: Its First Half Century, Volume 1, History (Washington, DC: Brookings Institution Press, 1997), 1–14, 57–138. Also see Catherine Gwin, U.S. Relations with the World Bank, 1945–1992 (Washington, DC: Brookings Institution Press, 1994), 195–207.
2. Many analysts focus primarily on productivity as the source of American economic growth in the twentieth century. See, for instance, Marc Levinson, An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy (New York: Basic Books, 2016). Unfortunately, this leaves out the innovative goods and services that frequently drive the growth process, especially in the digital era.
3. Alvin H. Hansen, the distinguished Harvard economist, had been insisting since the late 1930s that the United States had entered a phase of “secular stagnation.” See, for instance, his presidential address to the American Economic Association, “Economic Progress and Declining Population Growth,” American Economic Review 29 (March 1939): 1–15. See also the following by Hansen: Full Recovery or Stagnation? (New York: W. W. Norton, 1938); America’s Role in the World Economy (New York: W. W. Norton, 1945); and Economic Policy and Full Employment (New York: McGraw-Hill, 1947).
4. All of the information on the budget in this chapter is from Susan B. Carter et al., Historical Statistics of the United States: Earliest Times to the Present, vol. 5 (New York: Cambridge University Press, 2006); see esp. 102 on the deficits.
5. Michael J. Hogan, The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947–1952 (New York: Cambridge University Press, 1987). See also Barry Eichengreen, The European Economy Since 1945: Coordinated Capitalism and Beyond (Princeton, NJ: Princeton University Press, 2007), esp. 52–130.
6. The conflicts had been fully elucidated in the debate over the Employment Act of 1946.
7. Phillip G. Henderson, Managing the Presidency: The Eisenhower Legacy—from Kennedy to Reagan (Boulder, CO: Westview Press, 1988) is an excellent study of Eisenhower’s style of management. See also Bradley H. Patterson Jr., “Dwight Eisenhower’s Innovations in the Structure and Operations of the Modern White House,” Presidential Studies Quarterly 24, no. 2 (Spring 1994): 277–298.
8. John Kenneth Galbraith, The Affluent Society (Boston: Houghton Mifflin, 1958), 7–20. Galbraith labeled this collection of ideas “the conventional wisdom.”
9. Installment buying was picking up in the 1950s, but many Americans, like Eisenhower, were wary of debt. See Alan Ehrenhalt, The Lost City: Discovering the Forgotten Virtues of Community in the Chicago of the 1950s (New York: Basic Books, 1995), esp. 59–85 and 104–110. Americans were, however, buying cars on the installment plan, as described in Sally H. Clarke, Trust and Power: Consume
rs, the Modern Corporation, and the Making of the United States Automobile Market (New York: Cambridge University Press, 2007), esp. part 3 on the mature market, 1945–1965.
10. Jean Edward Smith, Eisenhower in War and Peace (New York: Random House, 2012), 470; Ellis D. Slater et al., The Ike I Knew (Baltimore: Ellis D. Slater Trust, 1980), 3. On August 25, 1950, while thanking Ike for supplying him with an abundant breakfast at an occasion in Denver, Slater commented on “the boys in Washington.” He said, “Even with respect to taxes, the public condemns the [Truman] administration for not being more realistic.”
11. DDE to George Arthur Sloan, March 6, 1950, Papers, 11:1003–1004. The Eisenhowers had spent an evening with Mr. and Mrs. Sloan in February 1950. Mrs. Sloan was the former Florence Lincoln Rockefeller.
12. DDE to Sloan, January 3, 1952, Papers, 12:836–838.
13. Ibid. Italics added.
14. See DDE to Sloan, January 29, February 8, and March 18, 1952, Papers, 13:928–932, 948–949, 1047.
15. DDE to Sloan, February 8 and 21, 1952, Papers, 13:948–949, 1007–1009.
16. See, for instance, DDE to Sloan, March 20, 1952, Papers, 13:1097–1104. Even here, however, Ike would not argue about “specific sums for any specific purpose.” He had fought that battle too often as Chief of Staff. See also DDE to Sloan, March 25, 1952, Papers, 13:1118–1119.
17. William M. McClenahan Jr. and William H. Becker, Eisenhower and the Cold War Economy (Baltimore: Johns Hopkins University Press, 2011), 25–29, do an excellent job of introducing Ike’s new team of advisors. The other two members of the council were Neil Jacoby, dean of UCLA’s business school, and Walter W. Stewart, an economist affiliated with the Institute for Advanced Study at Princeton University and a frequent advisor to various government organizations. His expertise in banking was especially notable.
18. On price controls, see Hugh Rockoff, Drastic Measures: A History of Wage and Price Controls in the United States (New York: Cambridge University Press, 1984).
19. Dwight David Eisenhower, Annual Message to the Congress on the State of the Union, February 2, 1953. For Eisenhower’s opposition to public power, see Wyatt Wells, “Public Power in the Eisenhower Administration,” Journal of Policy History 20, no. 2 (2008): 227–262.
20. DDE, Diary, June 1, 1953, Papers, 14:265–267. Between 1952 and 1953, the budget deficit that worried Eisenhower had increased by more than 433 percent. For a monetary perspective on the “crisis” in early 1953, see Milton Friedman and Anna Jacobson Schwartz, A Monetary History of the United States, 1867–1960 (Princeton, NJ: Princeton University Press, 1963), 612–620. For a more recent and substantially more favorable perspective, see Christina D. Romer and David H. Romer, “What Ends Recessions?,” in NBER Macroeconomics Annual 1994, Volume 9, ed. Stanley Fischer and Julio J. Rotemberg, available at http://www.nber.org/books/fisc94-1; and the same authors’ “The Evolution of Economic Understanding and Postwar Stabilization Policy,” NBER Working Paper No. 9274, available at http://www.nber.org/papers/w9274. The authors comment on an “interesting evolution from a crude but fundamentally sensible model of how the economy worked in the 1950s, to more formal but faulty models in the 1960s and 1970s, and finally to a model that was both sensible and sophisticated in the 1980s and 1990s.”
21. David A. Nichols, Ike and McCarthy: Dwight Eisenhower’s Secret Campaign Against Joseph McCarthy (New York: Simon and Schuster, 2017) tells the full story. With the death in 1953 of Senator Taft and McCarthy’s defeat in 1954, Ike’s hold on the Republican Party was strengthened. It was, however, never complete.
22. On Ike and Congress see in particular Smith, Eisenhower, 581–601, and Jim Newton, Eisenhower: The White House Years (New York: Doubleday, 2011), esp. 120–125, 141–155, 179, 239–240, 258–259, 305–306. See also Ken Collier, “Eisenhower and Congress: The Autopilot Presidency,” Presidential Studies Quarterly 24, no. 2 (Spring 1994): 309–325, and Henry Z. Scheele, “President Dwight D. Eisenhower and U.S. House Leader Charles A. Halleck: An Examination of an Executive-Legislative Relationship,” Presidential Studies Quarterly 23, no. 2 (Spring 1993): 289–299.
23. The latter recession was more severe, with unemployment reaching a peak of 7.6 percent, but both the administration and the Fed refused to change course in any major way.
24. On Eisenhower and his relationships with Fed chairman William McChesney Martin, see McClenahan and Becker, Eisenhower and the Cold War Economy, 45–48, 57, 61–62, 64, 86, 95–96.
25. Robert Maranto, “The Administrative Strategies of Republican Presidents from Eisenhower to Reagan,” Presidential Studies Quarterly 23, no. 4 (Fall 1993): 683–685, 694. See also Roger Biles, “Public Housing Policy in the Eisenhower Administration,” Mid-America 81, no. 1 (Winter 1999): 5–25.
26. On the new highway system, see DDE to Gabriel Hauge, February 4, 1953, Papers, 14:23–25. “Our cities still conform too rigidly to the patterns, customs, and practices of fifty years ago. Each year we add hundreds of thousands of new automobiles … but our road systems do not keep pace with the need.” The president asked Hauge to follow up with a study. For Eisenhower’s subsequent discussion of the issue, see Papers, 15:1067; Papers, 16:1556–1557, 1733–1734. Congress passed the Federal Aid Highway Act of 1956, and Eisenhower signed the bill on June 29, 1956. See also Mark H. Rose’s definitive account in Interstate: Express Highway Politics, 1941–56 (Lawrence: Regents Press of Kansas, 1979). Ike’s 1919 experience was with a cross-country military convoy that crept across the nation to California and gave him a good sense of just how bad America’s roads were. For an interesting popular account with great pictures of the interstate road system, see Dan McNichol, The Roads That Built America: The Incredible Story of the U.S. Interstate System (New York: Barnes and Noble Books, 2003). On Eisenhower’s more hesitant support for another infrastructure project, the St. Lawrence Seaway, see DDE, Memorandum to Legislative Leaders, Papers, 14:132–133. In 1954, the president nevertheless signed the bill authorizing US participation with Canada in construction of the seaway.
27. Sally H. Clarke, Regulation and the Revolution in United States Farm Productivity (New York: Cambridge University Press, 1994).
28. On the battles over agricultural programs and an outcome that was depressing to Eisenhower and his long-embattled secretary of agriculture, Ezra Taft Benson, see Alan L. Olmstead and Paul W. Rhode, “The Transformation of Northern Agriculture, 1910–1990,” in The Cambridge Economic History of the United States, vol. 3, The Twentieth Century, ed. Stanley L. Engerman and Robert E. Gallman (New York: Cambridge University Press, 2000), 693–742, and McClenahan and Becker, Eisenhower and the Cold War Economy, 113–151. For Eisenhower’s perspective on this lost cause, see DDE to Ezra Taft Benson, November 14, 1959, Papers, 20:1739–1740; DDE to Ezra Taft Benson, August 22, 1960, Papers, 21:2056–2058; and DDE to Mary Conger, April 5, 1960, Papers, 20:1895–98: Eisenhower lamented the inability in the case of wheat farmers “to reach any agreement as to what is the appropriate function of government.”
29. Most of Eisenhower’s biographers include this famous quotation: see, for instance, Smith, Eisenhower in War and Peace, 554n.
30. J. Merton England, A Patron for Pure Science: The National Science Foundation’s Formative Years, 1945–57 (Washington, DC: National Science Foundation, 1982), 211–217. See Eisenhower’s “Executive Order (10521) Concerning Government Scientific Research,” Appendix 1, 353–355.
31. On “spillovers,” see Richard N. Langlois and W. Edward Steinmueller, “The Evolution of Competitive Advantage in the Worldwide Semiconductor Industry, 1947–1996,” in Sources of Industrial Leadership: Studies of Seven Industries, ed. David C. Mowery and Richard R. Nelson (Cambridge: Cambridge University Press, 1999), 19–78; see also 181, 275, and 206 in the same volume.
32. Timothy F. Bresnahan and Franco Malerba, “Industrial Dynamics and the Evolution of Firms’ and Nations’ Competitive Capabilities in the World Computer Industry,” in Sources of Industrial Leadership, ed. Mowery and Nelson, 79�
��132, place the government purchases in their proper context. The government’s role was important to a number of firms, including IBM, whose leader, Thomas Watson, was an enthusiastic Eisenhower supporter.
33. DDE to William Edward Robinson, August 4, 1954, Papers, 15:1228–1231. This letter gives an excellent guide to the systematic way Eisenhower approached the problems of presidential leadership: “I agree, of course, that I must learn enough about the underlying problems of each kind so that I can apply reasonable logic in reaching the decisions that I am compelled inescapably to make. But some of them require knowledge that goes far beyond basic principles. The only recourse is to determine those to which I should give really studious attention and treat these more exhaustively than those I may more safely trust to instinct and to advisers. I suppose that the three most obvious classifications of the problem I am forced to consider are: (a) foreign affairs, (b) the domestic economy, and (c) domestic politics.” He took special note of “the farm problem, itself consisting of 20 or 30 identifiable individual problems.”
34. Langlois and Steinmueller, “The Evolution of Competitive Advantage,” provide an excellent description of the exciting early years and the origins of Silicon Valley. See also Hyungsub Choi’s detailed study “Manufacturing in Transit: Technical Practice, Organizational Change, and the Rise of the Semiconductor Industry in the United States and Japan, 1948–1960,” Ph.D. dissertation, Johns Hopkins University, 2007, and Walter Isaacson, The Innovators: How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution (New York: Simon and Schuster, 2014).
35. Christophe Lécuyer, Making Silicon Valley: Innovation and the Growth of High Tech, 1930–1970 (Cambridge, MA: MIT Press, 2006), 117–167, traces in meticulous detail the private sector innovations and the role that Stanford University and the US Department of Defense played in these complex developments. As Lécuyer makes clear, the prime actors in this entrepreneurial drama were in the firms, not in the public sector or at Stanford. See also Franco Malerba’s international perspective in The Semiconductor Business: The Economics of Rapid Growth and Decline (London: Frances Pinter, 1985), and talented journalist T. R. Reid’s The Chip: How Two Americans Invented the Microchip and Launched a Revolution (New York: Simon and Schuster, 1984).
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