Investing

How The Seven Biggest Presidential Speeches On The Economy Failed

Douglas A. McIntyre

1. Truman’s Railroad Strike Message
> Date: May 25, 1946
> President: Harry S. Truman
> Inflation: 8.3%
> GDP 1 yr. growth: -10.9% (the second worst since The Great Depression)
> Unemployment: 3.9%

On May 25, 1946, Truman said: “I come before the American people tonight at a time of great crisis. The crisis of Pearl Harbor was the result of action by a foreign enemy. The crisis tonight is caused by a group of men within our own country who place their private interests above the welfare of the nation.” The “group of men” happened to be the hundreds of thousands of coal workers that were on strike and the railroad workers that were on the verge of doing the same. Believing the unions were going too far by threatening to strike, Truman demanded the workers settle or he would implement measures such as drafting strikers into the armed forces. Mid-speech, Truman received word that the potential railroad strike had been settled. Days later, the coal strike ended as well. The president would face several more labor disputes during his two terms in office.

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2. Truman’s Marshall Plan Speech
> Date: November 17, 1947
> President: Harry S. Truman
> Inflation: 14.4%
> GDP 1 yr. growth: -3.4%
> Unemployment: 3.9%

On November 17, 1947, President Truman gave a speech to the 80th Congress, asking to give aid to France, Italy and Austria and to address the country’s rising inflation rate. “Today, inflation stands as an ominous threat to the prosperity we have achieved. We can no longer treat inflation–with spiraling prices and living costs–as some vague condition we may encounter in the future. We already have an alarming degree of inflation. And even more alarming, it is getting worse,” Truman said. The president went on to address the rising costs of specific items, noting that the average price for all cost of living items had increased 23% from the middle of 1946. His efforts were largely resisted by the 80th United States Congress, a group referred to by Truman as the “Do Nothing Congress.”

3. Truman On The Steel Industry DisputeR
> Date: June 10, 1952
> President: Harry S. Truman
> Inflation: 1.9%
> GDP 1 yr. growth: +3.8%
> Unemployment: 3.0%

In 1952, the United Steelworkers of America, working at U.S. Steel and nine other companies, began to strike, demanding wage increases. Prior to his speech, Truman had nationalized the steel industry — a decision that was quickly overturned by the courts. In his speech, Truman asked that the Congress authorize government operation of the steel mills. This request was not granted and the steelworkers were on strike for 53 days, at which time they reached an agreement with management.

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4. Nixon On Economic Policy
> Date: September 9, 1971
> President: Richard Nixon
> Inflation: 4.4%
> GDP 1 yr. growth: +3.4%
> Unemployment: 5.9%

In 1971, the United States was in the process of pulling its forces from Vietnam. It was also entering its worst economic period in years, one from which it would struggle to pull itself for more than half a decade. Unemployment was at a ten-year high at the time, and GDP had failed to grow for the first time since 1958. President Nixon addressed Congress, begging for bipartisan support. “As the dangers of war recede, the challenges of peace increase. It is customary for a President to ask the Congress for bipartisan support in meeting the challenges of war. Today I come before you to ask bipartisan support in meeting the challenges of peace.” In his speech, Nixon pleaded the Congress to cut taxes on vehicles, subsidize job growth, and cut income taxes. The income tax cuts were not meaningful, and the jobs were not created. Unemployment remained high and would not drop below 1971 levels until the Clinton administration.