America, 1952
At the turn of the century, shaken by his historian's vision of things to
come, Henry Adams forecast a future in which "the new American-the child of
incalculable coal power, chemical power, electric power and radiating energy, as
well as of new forces yet undetermined-must be a sort of god compared with any
former creation of nature."
In 1952, no one felt less like a god than the tax-burdened, world-involved
American. But in 1952, with only 7% of the world's people, the U.S. produced 52%
of the world's mechanical energy, and used it so wisely that it made 65% of the
world's manufactured goods. In 1952 the U.S. achieved a gross national product
of $350 billion, the greatest material outpouring in its history.
There were two even more important facts about the U.S. economy in 1952. It was
the most stable year in the last decade. Despite the great production of goods,
the limits of expansion were not reached.
In the first years after World War II, businessmen expanded to catch up with
existing demand; in 1952 they expanded to meet future demands, on which they put
no limits. U.S. business had climbed to what it thought to be a peak, only to
find that it had reached a broad plateau and that the peaks were still ahead.
The forecast for further expansion was not based merely on arms-spending. It was
predicated as well on a continued and continually surprising population
increase. In 1952 the U.S. population rose 3,000,000-50% more than estimates-to
a new high of 157 million. And the new mouths were not considered liabilities,
as in China, but new customers. Prosperity by population had become one of the
most important dynamics of U.S. growth.
If the U.S. productive achievement was an overall triumph, it was seriously
marred by one grave failure. The U.S. did not produce enough arms to meet its
needs in Korea, to supply NATO, and to shore up the free world at all its other
weak points. It even failed to turn out enough ammunition to supply the limited
forces in Korea.
Slippages & Shortfalls
Too much of 1952'S production was in peacetime goods which the U.S. could
afford to do without. The U.S. got 4,000,000 new auto~ although only 3,000,000
had been scheduled for production. But out of 12,000 military aircraft called
for, only 9,000 were completed. Sample bottleneck: for lack of a small
electronic part, engines could not be delivered to North American Aviation and
powerless Sabre jets had to be lined up in long rows outside the plant. War
production fell so far behind schedule that the schedules themselves were cut
during the year so as to lower the peak of the arms program and stretch it out
well into 1956. Even so, production lagged 5-10% behind the reduced schedules.
The chief responsibility for this rests almost wholly on the Truman
Administration, which wanted visible civilian prosperity and no civilian
hardships to bolster its campaign slogan: "You never had it so good."
The production of civilian goods far exceeded estimates. Builders, who had
thought materials restrictions would limit them to 600,000 new houses, actually
turned out 1,000,000 to complete their second biggest year on record (top:
1,400,000 in 1950). Instead of an expected 3,000,000 refrigerators, 3,400,000
were produced; instead of 2,000,000 washing machines, 3,000,000; instead of
4,000,000 TV sets, 5,000,000.
Whatever the lack of arms production, the prosperity was there and almost every
civilian shared in it. Personal income after taxes soared to a record $235
billion, a gain of $9 billion in a year. Manufacturing wages hit a new high of
$71 a week. The higher wages, plus higher costs all around, knocked industry's
profits down nearly $2 billion, to an estimated $17 billion after taxes (6%
under 1951). Stockholders got a better break. With much of industry's expansion
already paid for out of past profits, dividends edged up from $9 billion to $9.3
billion.
While the record income set off the biggest retail spending in U.S. history
($215 billion v. $208 billion a year before), consumers also managed to salt
away more savings in 1952 ($18.5 billion, $1.5 billion rise over '51). Never had
the U.S. had so many jobs (62 million) and so little peacetime unemployment
(1,700,000). Its prosperity was extravagantly symbolized by a Texan's
wisecracking solution for Dallas' traffic problem: "Rule all Cadillacs off the
street during rush hours." Answered a reader of the Dallas News: "If you did
that, how would we working people get home?"