The South: New Deal, World War II, and the fifties

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Chapter 12 in A History of American State and Local Economic Development, 2017, pp 353-383 from Edward Elgar Publishing

Abstract: FDR determined to break the low-wage, agricultural export economy of the traditional South, the USA’s “number one problem,†through the Tennessee Valley Authority (TVA), manufacturing minimum wage, farm mechanization and his “Second Reconstruction.†The South was not particularly grateful. It resisted, preferring to pursue what economic growth could be managed by strategies such as Balance Agriculture with Industry (BAWI) and an aggressive attraction and promotion campaign to bring in mobile northern firms—which, for its own reasons, the North failed to appreciate. The Second Reconstruction, infused with unionism and a determination to save the New England textile industry, did little to foster southern cooperation, and instead led to the first wave of “right to work†legislation in the middle 1940s. Whatever restructuring was accomplished by the Second Reconstruction soon blurred into the federal industrial decentralization and war production programs. The result was a four-year building spree in which northern firms set up branch manufacturing facilities throughout the South and the federal government built roads, encouraged railroads and built war production cities, military bases and naval ports, and every city got its airfield. The Texas Gulf coast built up its petrochemical and refining industries and Dallas became a center for high-technology military air-based technology and production. By war’s end the obvious regional change that had occurred manifested itself in more than a decade of a “shadow war†between North and South over, of all things, the industrial revenue bond. In the process, the IRB spread, in many variants, across the nation, serving as the prod for northern, western and southern states to set up a state-level system of IRB tax-exempt bond issuance. Those agencies developed alongside the reconversion of FDR-required state planning agencies into state-level EDOs after WWII. The states had entered into sub-state economic development.

Keywords: Economics and Finance; Politics and Public Policy (search for similar items in EconPapers)
Date: 2017
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