While MacArthur helped Japan turn into a peaceful and prosperous democracy, the Chinese were fighting among themselves. In 1949, Communist leader Mao Tsetung won, pushing the non-Communist Chinese leadership off the mainland and on to the island of Taiwan.
The Republicans roundly blamed Truman for "losing" China, but in fact the huge country had never had a democratic government to defend. The Soviet Union's detonation of its first atomic bomb around this same time added to America's worry about the world.
The Loyalty Review Board
President Truman actually launched the anti-Communist hysteria in the United States by appointing a Loyalty Review Board in 1947 that checked to see whether any of the 3 million federal employees were members of supposedly subversive organizations. About 3,000 federal workers resigned under pressure, although very few of them were charged with crimes. Some Hollywood writers were blacklisted for political reasons and spent years unable to get work because of their alleged sympathy with Communist and left-wing organizations.
By 1949, supporting those so-called subversive groups was a crime, and members of the U.S. Communist Party went to jail for supposedly advocating the overthrow of the U.S. government. The House Committee on Un-American Activities (HUAC) had a field day uncovering suspected Communists everywhere, led by an ambitious young congressman. Richard Nixon became famous for hounding Communists and their sympathizers in high-level government jobs. He didn't mind calling anyone who got in his way a Communist sympathizer.
In 1950, Truman vetoed a bill that would have given the president power to arrest and lock up any suspicious person during a security emergency because it sounded too much like a police state.
In the midst of paranoia, however, Truman did manage to build some public housing, raise the minimum wage, and extend Social Security. He also proposed a national health insurance system which did not pass. Any further social programs were held hostage by the Cold War.
Senator Joseph McCarthy made outrageous, mostly unverified allegations that Communists and their sympathizers had infiltrated the federal government. He said that hundreds of known Communists worked in the State Department, and he pretended to have a list of their names. He accused respected officials of being "fellow travelers" with Communists, even picking on George Marshall (former army chief of staff, secretary of state, and defense secretary and author of the Marshall Plan) and President Eisenhower.
Communist actions in China and Korea and the speed with which the Soviets had gotten the atomic bomb scared Americans enough that they sometimes believed McCarthy's wild accusations. Every time he made a charge that proved false, he simply came up with a new charge. His witch hunt was called McCarthyism (1952).
McCarthy finally went overboard when he attacked the United States Army. In the great tradition of journalists who would not be frightened away from telling the truth, television's Edward R. Murrow took on McCarthy when politicians were afraid to act. After 35 days of televised Army-McCarthy Hearings (1954), many Americans saw who McCarthy really was: a mean-spirited liar who twisted the people's worries to get power. He was censured by the Senate and died of chronic alcoholism three years later.
McCarthyism showed the power of fear connected to conspiracy theory; it still serves as a useful example of the danger of demagogic leadership.