The fall of France in May 1940 was to be a wake-up call in official Washington. To that point, those concerned with shaping U.S. economic policy had taken little note of events in Europe. The task of moving the domestic economy toward full employment remained their primary concern. The Nazi blitzkrieg in continental Western Europe moved the issue of an American defense program to a much higher position on the national agenda.

In the summer of 1940, it came easily to contemporaries to compare their situation with the one the nation had faced in World War I. In the judgment of a number of economists within the bureaucracy, economic mobilization in the 1940s ought to be an easier task than it had been in 1917–18. By contrast with the earlier episode, expertise that economists could provide was readily at hand: The mushrooming of the New Deal agencies had already positioned them within government. Moreover, the professional experiences of many of them during the 1930s suggested that the nation could expect qualitative improvement in the advice they offered. The tools of the “new” macroeconomics, it appeared, could usefully be redeployed to shape fiscal policies to restrain private spending to magnitudes compatible with the targets set for a defense build-up. But that was not all. Economists well placed in the official establishment by 1940 believed that the 1933–35 experience with the NRA had taught useful lessons about how a new round of industrial mobilization should be organized.