The Safety Net
WITH AN UNEMPLOYMENT rate of less than 2 percent, the World War II economy was notably artificial. Profits, wages and prices, labor mobility, strikes, and production and distribution of civilian goods were all successfully controlled. Yet, with the Depression in such recent memory, only the heedless would have dismissed the possibility of a postwar bust. The thoughtful were also reminded of the role the worldwide depression had played in the rise of fascist dictatorships in Italy and Germany and the territorial expansionism of Japan. Poverty also fostered that other enemy of democracy and capitalism--Marxist communism.
The New Deal legacy of economic and social legislation was expected to have a stabilizing effect in case of a postwar recession. The uncontrolled wheeling and dealing of the 1920s would be impossible. Regulatory laws now governed the operation of banks and securities exchanges. Bank deposits were insured; home mortgages could be refinanced; credits and loans were available to farmers. The National Labor Relations Act guaranteed the right of employees to join labor unions and to engage in collective bargaining through representatives of their own choosing. The Fair Labor Standards Act established a minimum wage and maximum (40- hour) workweek, and outlawed child labor under the age of sixteen. The