Lesson 2: The Straight Road Down the Middle

Lesson Focus

Explore President Eisenhower's 'middle road' economic policy. We'll see how he balanced conservative and liberal ideas, leading to national prosperity but also creating new challenges for small farmers and organized labor.

People to Know

Dwight D. Eisenhower

Learning Objectives

• Explain President Eisenhower's 'middle road' economic policies and how they balanced different interests.
• Discuss the economic challenges small farmers faced, including overproduction and the rise of large-scale agribusinesses.

President Eisenhower wanted to limit government's role, but he recognized that Americans strongly supported New Deal programs.
He chose a middle path, expanding Social Security for millions while also calling other federal projects like the TVA "creeping socialism."
This balanced approach during the 1950s pleased most Americans by keeping popular social programs while also promoting business, a policy he called the "straight road down the middle."

Eisenhower’s pro-business stance meant the government did not challenge thousands of corporate mergers.
In response to this growing corporate power, the American Federation of Labor and the Congress of Industrial Organizations merged in 1955, forming the powerful AFL-CIO.
Pay special attention to how this created two major forces: giant corporations with massive budgets and strong unions that successfully negotiated higher pay and better benefits for their members.

Following the successful AFL-CIO merger, the labor movement faced new problems.
Congressional investigations in the 1950s uncovered corruption and strong-arm tactics in some unions, such as the Teamsters Union, which was accused of misusing funds.
This negative publicity turned public opinion against unions, and their membership growth slowed by 1957. This limited their ability to organize lower-paid workers, who remained vulnerable.

While many Americans prospered, small farmers faced economic ruin in the 1950s.
Improved farming technology led to massive overproduction, which caused crop prices to drop sharply. At the same time, the government reduced financial support for farmers.
As a result, small family farms could no longer make a profit and were forced to sell their land, signaling a major decline in traditional American agriculture.

As small farms failed, large-scale modern farms called agribusinesses took their place.
These massive farms were efficient but depended on cheap labor to harvest their crops, so they began hiring seasonal migrant workers, many from Mexico.
Note that these workers were not protected by labor laws, forcing them to endure low pay and terrible living conditions. This created a new, exploited workforce within the prosperous American economy.

The economic growth of the 1950s was fueled by a huge increase in consumer credit and borrowing.
This spending boom encouraged industries to produce more goods. However, President Eisenhower worried about inflation (rapidly rising prices) and tried to cut government spending to control it.
His actions backfired and triggered a sharp recession in 1957-1958, causing unemployment to rise and revealing the instability underlying the era's prosperity.