Clearing Up Some Misinformation, Part 2

In Part 1 of my commentary, called Clearing Up Some Misinformation, Part 1, I wrote about some of the incorrect characterization’s in President Obama’s speech about free markets and the policies of the 1920s as he addressed Osawatomie High School on December 6, 2011.  I focused on some general terms, such as ‘markets’ and ‘economy’ and I also focused heavily on the government policies of the 1920s and how they were not laissez –faire.  In part two, I will focus on the 1950s and 1960s and see how the President’s characterization stacks up to historical accuracy.  The President said in his speech: 

Now, it’s a simple theory [free market economics]. And we have to admit, it’s one that speaks to our rugged individualism and our healthy skepticism of too much government. That’s in America’s DNA. And that theory fits well on a bumper sticker.  But here’s the problem: It doesn’t work. It has never worked.  It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible postwar booms of the ‘50s and ‘60s. And it didn’t work when we tried it during the last decade.  I mean, understand, it’s not as if we haven’t tried this theory.

The President says that the free market is not what led to the postwar booms of the 1950s and 1960s but implied that it was government working in concert with private industry that created prosperity.  So what did lead to the postwar booms of the ‘50s and ‘60s?