Business & Finance: Gulliver Unbound

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"The whole world is watching us, amazed at the exhibition of a giant who cannot pull himself together even to take care of his own needs." Like the pangs of conscience during a hangover, these words of wise old Bernard Baruch in mid-1946 were perhaps overfraught with a sense of guilt. But at the time they seemed fully warranted.

For the U.S. in 1946 rid itself of wartime controls as a giant might escape from a straitjacket—roaring, ripping and kicking, with little regard for himself or the bystanders. Nevertheless, Gulliver, freed, defeated most of the Blefuscudians —the shortages of foods & goods. And the great drop in Government spending ($45 billion less than in 1945) was made up by private spending. U.S. retail sales reached a record of $96 billion; $105 billion was poured out in wages & salaries, and net corporate profits totaled an estimated $12 billion, some 20% more than 1944's record high. Farmers raised the most profitable crop in history. And the nation's gross national product (goods, services, construction, etc.) soared up into the ionosphere. The total product—an estimated $195 billion—was some 61% more than in any other peacetime year.

Most of the worst shortages had ended by year's end. Once-bare shelves were heaped with white shirts; nylon and meat lines melted away; "sale" was reintroduced into the language. There was more than there had ever been—at a price. In turning it out, the U.S., by any temperate standard, had done a giant's job.

Great Expectations. Yet no one seemed satisfied. (Americans never are.) For the great expectations had been greater than even Gulliver unbound could fulfill.

The auto industry had dreamed of making 6,000,000 cars and trucks; it made only 3,000,000. Of the 1,200,000 houses blueprinted under Wilson Wyatt's program, the U.S. finished only about 700,000. And even the overall glitter of profits proved fool's gold in many an industry. Example: Westinghouse made more peacetime goods than ever—and had an operating loss of $50,000,000, twice as much as during the three worst years of the depression.

Nor did the first full postwar year see any realization of the bright, Cellophaned dreams that had been projected for it. Almost everything that was made had a prewar look. Even the Air Age, which alone got a wing through the door, failed to come through. U.S. planes circled the globe—and brought back red ink for most of the companies that flew them. Typical of the year's disappointment were the millions of ball-point pens, all of which looked like the very latest thing, but many of which would not write at all.

Such fumbling on the part of the U.S. giant was vastly irritating to many a U.S. citizen. But to the citizens of the world it was worse than irritating; it seemed dangerous — as if the giant were actually in danger of toppling. For this reason, the question of why the U.S. had faltered —and how much — became of paramount importance to everyone.