The Triumph of Politics Over Science
After World War II, as the economy was converted from a garrison state to meet civilian needs, economists predicted dire times.
Just as after World War I, conventional academic wisdom saw no upside to the end of wartime spending that, according to academic legend, ended the Great Depression.
A sweeping Republican victory in the Congressional election of 1946 had ended the economic regime of wartime government planning and spending. Dropping from 42% of GDP to 14%, government spending plummeted by a total of 61% between 1945 and 1947.
Some 150,000 government regulators were laid off, along with perhaps a million other civilian government employees. The War Production Board, the War Labor Board, and the Office of Price Administration were all dismantled.