History 479

Devine

Spring 2007

FINAL EXAM STUDY QUESTIONS

1. What did unit banking laws have to do with worsening the Depression? If they were making things worse, why weren’t they repealed?
2. Why does Powell believe FDR’s raising taxes and tariffs in 1933 was a bad decision? Why does be believe high taxes fostered continued high rates of unemployment?
3. Through the NRA, New Dealers (often veterans of the War Industries Board) sought to establish a planned economy that would eliminate the negative aspects of competition and replace them with harmonious, well-ordered government-business-labor relations. Is this how things worked out? Why didn’t the NRA live up to the reformers’ hopes?
4. The AAA sought to raise agricultural prices, raise tariffs, and “dump” American products on foreign markets in order to give relief to American farmers. Why does Powell believe these policies were ill-advised?
5. Why does Powell believe the New Deal attorney Thurmond Arnold’s anti-trust law suits during the late 1930s were unnecessary and even harmful to the process of economic recovery?
6. Ronald Radosh argues that “corporate liberals” in the New Deal undermined the potential for radical reform during the 1930s. Why does Anthony Badger disagree?
7. Why does Roger Lotchin argue that it was both politically and economically unrealistic to expect women to keep their factory jobs once World War II had ended?According to Lotchin, why is the story of middle class women’s voluntary contributions to the war effort even more significant that that of “Rosie the Riveter”?
8. What factors – political, economic, organizational, and ideological – kept the United States and the Roosevelt administration from launching an efficient, streamlined, long-range plan for mobilization in the months and years leading up to World War II?
9. Why could one argue that the New Dealers in the Roosevelt administration hindered the process of rearmament and mobilization for World War II? According to William O’Neill, why did they prefer a “politically correct” war effort than an efficient one?
10. What were some of the major transformations in the US economy during the 1950s?
11. How did the “three C’s” – cars, construction, and credit – contribute to ‘50s prosperity?
12. With regard to its effect on the economy and on everyday life, how was the interstate highway system of the 1950s similar to the railroad system of the 1880s? How was it different?
13. Why might “poverty in the midst of plenty” be an apt phrase to describe the social situation in the US during the 1950s? Why was persistent poverty not a widespread concern during the 1950s?
14. According to Nickles, why did working-class taste not only persist as blue-collar families became more prosperous but also pervade the mass market?
15. What was the difference between “middle-income” and “middle-class”? Why was it important for marketers and manufacturers of durable goods to understand this difference?
16. During the 1950s, the cultural critic Vance Packard accused marketers of designing status symbols like the tail fin and chrome covered refrigerator as a way of fostering status anxiety and encouraging conspicuous consumption. How does Nickles’ article call into question Packard’s notion of a conspiracy of manipulating marketers?
17. What were the basic tenets of “stagnationism”? Why was this theory discredited?
18. During the election of 1960, what criticisms did John F. Kennedy and the Democrats make of the Eisenhower administration’s economic policies? How did the emphasis of Eisenhower’s policies differ from the alternatives that Kennedy was proposing?
19. What were the three major lines of John Kennedy’s “Keynes-cum-growth” economic policy? (see Collins p. 18 ff) How did this policy differ markedly from New Deal economic policy?
20. How did the assumptions of “growth liberalism” help shape U.S. defense policy and foreign policy? (Flexible response, the escalation of the Vietnam war, etc.)
21. Why does Robert Collins argue that economics, moreso than the anti-war protests, played a determinative role in precipitating President Johnson’s decision to scale down U.S. involvement in Vietnam?
22. Why did Johnson’s economic advisers urge him to introduce a tax increase in 1966? How could a tax increase address their fears of inflation? What was causing the inflation? (see Matusow)
23. Why was Johnson unwilling to introduce a tax increase? What impact would such an increase have had on Johnson’s Great Society agenda and his Vietnam War agenda? (see Matusow)
24. Why did Milton Freidman argue that a tax increase would not bring down inflation? In other words, why would increased government revenue (the result of a tax hike) and the accompanying decrease in government borrowing offset any advantage gained by tax increases that decreased consumer spending? (see Matusow)
25. What is the difference between fiscal and monetary policy? How did Keynesians and monetarists differ regarding the role government should play in the economy?
26. What did the Phillips curve suggest about the relationship between unemployment and inflation? How did Keynesian economists explain this relationship?
27. According to Michael Harrington, why were the poor “invisible” – both physically and politically – during the 1950s?
28. Why are the “new poor” immune to, and even victims of, “progress”? Why might these people say, “Progress is misery”?
29. How does the poverty during the time Harrington is writing differ from the poverty of the Great Depression? According to Harrington, what is the difference between living in poverty and being impoverished?
30. According to John Andrew’s chapter “The War on Poverty,” what were some of the shortcomings of President Johnson’s job training and community action programs?
31. Despite their genuine commitment to eradicating poverty, why did the designers of the “War on Poverty” find it so difficult to achieve their goal? What factors kept anti-poverty programs from succeeding?
32. Why did Nixon’s economic advisors believe that price controls were a bad idea in 1973? Why did they say such controls would “translate inflation into shortage”?
33. If the economy is producing at full capacity but demand still increases, what results inflation or deflation? Why?
34. What impact did rising oil prices have on the US economy during the early 1970s? Why did high oil prices limit economic growth?
35. During the great inflation of the 1970s, why were many American individuals and businesses willing to take out loans even though interest rates were high?
36. Why did the Democrats want to increase federal spending during the mid-1970s? Why did President Ford want to hold the line or reduce federal spending?
37. Why would a “cheap” (or inflated) U.S. dollar help American manufacturers who exported their goods and products? What effect did a “cheap” dollar have on the trade deficit? What effect did a “cheap” dollar have on inflation within the U.S.?
38. How did deregulation help control inflation without increasing unemployment?
39. Why was increasing worker productivity seen as an effective way to control inflation?
40. Why, according to Bruce Schulman, was the great inflation of the 1970s “a transformative event?” (p. 131) What changes occurred? Why was inflation such a big deal?
41. How did inflation affect attitudes about credit, spending, and investing? How did it help to produce changes in the way people did their banking?
42. What was “stagflation” and why did it contradict conventional economic wisdom? Why did it prove so devastating for the economic position of the average American?
43. What role did Federal Reserve Chairman Paul Volcker play in fighting inflation after his appointment in 1979? What policies did he pursue? What were their effects?
44. According to Sloan, why did the economy begin to recover after 1982?
45. In what areas did the Reagan economic policies of the 1980s succeed and why? In what areas did they fail to achieve their goals and why?
46. What factors caused the high deficits that characterized the Reagan/Bush years? (Note that there is some disagreement on this issue.) What impact did these deficits have on the economy? Did they matter?
47. What factors account for the increasing economic inequalities of the Reagan/Bush years?
48. What role did new information technology play in increasing worker productivity during the 1990s?
49. After taking office, why did President Clinton decide to abandon his plans for increased public investment and instead focus on reducing the deficit and free trade?
50. How does capitalism encourage the virtues of honesty, fairness, civility, compassion, and heroism? If one adheres to these virtues, why is it more likely one will succeed in business than if one didn’t adhere to them?
51. Why does Mueller believe it is inaccurate to say that capitalists fabricate demand for whatever they happen to be selling at the moment?
52. According to Mueller, what are the four significant ideas that economists have come to espouse over the past few decades? (see p. 100 ff) How has acceptance of these ideas by government officials led to a more peaceful and prosperous world?
53. If countries are to prosper, why is it important that they adopt the appropriate business virtues? Why can’t these business virtues simply be “superimposed” from above by governments passing laws or establishing courts? What “innovation” has to happen for such virtues to take root and prosper within a country or culture?
54. How does Mueller define a democratic government? Under what conditions does such a government emerge? Why does democracy work better than other political systems?
55. According to Mueller, why are quests for equality, for deliberative consensus, for active participation, and for an enlightened citizenry not necessarily undesirable, but “substantially hopeless”?
56. Why does Mueller believe that democracy is fairly easily achieved? What keeps it from being achieved?
57. In what ways can democracy benefit capitalist growth?