Nixon and Social Immobilism

...I would suggest three reasons: (I) American corporations have a vast stake in world trade and investment...

...Very little of the benefits...

...in the political sense, the answer is no...

...One measure of this expense is to be found in the outlays budgeted for General Purpose Forces which, according to the budget authored by former Secretary of Defense Clifford (and largely concurred in by his successor), "consist of those land, sea and air units on which we rely for all military actions short of strategic nuclear war...

...Maintenance of foreign investment outlets and markets, as well as their continued expansion, depend on political stability and military security abroad, which are increasingly expensive to buy...

...What is more, any cut in such spending made possible by the end of the Vietnam War will encounter powerful resist ance...

...Nixon has not reached out to such groups, nor is he likely to...

...In this, too, he has proved right: the sum of so-called relatively uncontrollable civilian outlays under present laws, exclusive of Social Security and Medicare, will go up by $5.7 billion in fiscal 1970--equivalent to more than half the "calculated" fiscal dividend...

...or to provide the special facilities— offered by all advanced countries other than the U.S.—for rural migrants' transition to urban living...

...output is exported, and roughly the same proportion of the labor force is employed in export industries...

...Military outlays can be cut sharply (a way of doing this has been proposed by Carl Kay sen in Agenda for the Nation...

...There are also many less visible interests which restrict the availability of service resources...

...Whatever its significance in broad historical terms, the world role of the U.S...

...Either decisions will be made to reduce those expenditures or they may themselves create a situation in which further expenditure increases will occur...

...Since the early sixties, liberal economists have held out the hope that the "fiscal dividend" would pay for the added goods and services required for large-scale social reconstruction, although admittedly the dividend might also be applied to reducing taxes or the public debt...

...Its outcome is not predictable, but its success hinges upon the recognition that it is inseverably linked to the struggle for peace and a reduction in armaments...

...The American economy is intertwined with a world economy that has been shaped by the Cold War and the American presence abroad...

...It is unlikely that the deterioration in the condition of the poor, in the cities, and in the physical environment will halt...

...Now there are but two ways of dealing meaningfully with the problem of financing social reconstruction...

...It will impinge only marginally on the patterns of resource flows between the private and public sectors...

...The very fact that Republicans now shoulder national responsibilities compels him to act— on the urban crisis, the draft, high employment levels, monetary soundness, enforcement of federal guidelines...

...Since Roosevelt, Democratic presidents have, in order to secure their rule, accommodated, even encouraged, new claims to social integration by disadvantaged groups...

...He has] betrayed a certain eagerness to hold the middle of the road...

...It has yet to be shown that a high economic growth rate assuring full employment can be sustained without heavy defense spending...

...I I T MAY BE ARGUED that Nixon, who accepts the prevailing balance of political forces, is not likely to believe that they limit him in establishing programs of social amelioration...

...In a technical sense, the answer is yes...

...But the status quo is a philistine illusion, resting as it does on the assumption that social relations remain static and that inequities do not get worse if allowed to persist...

...The decision weakened the opposition while making concessions to it...

...For all the welfare programs the Democrats initiated, and the support they gave to the demands of labor and the poor, they did not, under Kennedy or Johnson, change the constellation of social and economic forces whose resistance to reform lies at the root of our recurrent crises...

...For the fiscal dividend is likely to be preempted by the claims of those closest to influencing budgetary decisions...

...Attempts at even reducing them entail a threat of instability in many of the countries concerned...

...The budget proposed by Johnson projects surpluses for the current and coming fiscal years, and while the magnitude— even the attainment—of the actual surpluses remains uncertain, the Nixon Administration is bound to harden the line of fiscal conservatism anticipated by its predecessor...

...if they did they would lose, as Goldwater lost in 1964, a good part of their liberal wing...

...Their NIXON AND SOCIAL IMMOBILISM plant and equipment spending abroad is equivalent to 16 percent of similar domestic outlays, and their sales from their foreign factories amount to an equivalent 8-10 percent of domestic sales...

...is of benefit not merely to America's ruling classes, but to tens of millions of ordinary people as well...

...Yet, if his actions are to go beyond token gestures, they are bound in time to open up all the old fissures in the Republican party, threatening to fragment it as fiercely as the Democrats have been...

...The preemption of the fiscal dividend, like the claims crystallized in the federal budget, indicate some of the constraints within which Nixon will have to operate if he proves unable or unwilling to contain the pressures of military-industrial interests or to refrain from military "solutions" abroad...

...Expenditures for General Purpose Forces have been projected at $32.1 billion in fiscal 1970, a sum slightly lower than in 1969, but higher by $12 billion than in 1965...

...he also accounted for the entire increment in the number of votes stemming from the rise in the votingage population over the previous eight years...

...Nixon would surely prefer the status quo, since that is a condition for the Republican party's retaining and expanding its electoral majority...

...These calculations imply that the Wallace vote represents a temporary aberration, a rejection of the two-party system, and that by quasi-rightist policies, the Republicans can in the future capture a large portion of Wallace supporters...

...Thus, as against Harrington's hope for a "dynamic" Democratic majority in 1972, consisting of the working masses, the poor, and of liberal intellectuals, there looms the possibility of an "immobilistic" Republican majority, composed of small-town and suburban middle classes, betteroff workers, and corporate liberals...

...Those constraints will tighten their grip upon what freedom of action he has...

...Farm income stabilization is projected at $ 3.9 billion in fiscal 1970, and total aid to agriculture at more than $5 billion...

...But beyond either of these possibilities there lies the question of constraints within which the Democrats operated and which the Republicans now experience, and which even the largest electoral majorities seem unable to weaken...

...They can also point to the economic stake which regions such as the South and West have in the large-scale defense employment, thus assuring themselves of ample support in Congress...

...go to farmers earning less than poverty income...

...Nixon, by contrast, begins skeptically with questions about what can be done...

...But will not the continued rapid growth of American productivity generate rising federal receipts, which in time will exceed federal expenditures even after allowing for unavoidable increases...

...3) As a concomitant to America's world role, the defense establishment has become a power in its own right, sustained by clientele of industrial, scientific, and regional interests...

...Charles Schultze, in NIXON AND SOCIAL IMMOBILISM the essay mentioned, figures that "after Vietnam" and beginning sometime prior to the mid-seventies, an annual fiscal dividend of $35-40 billion would become available...

...His decision to continue the antiballistic missile project initiated by Johnson, but to have it "protect" second-strike nuclear-attack capabilities rather than population, may be regarded as an example of this "centrism...

...Or taxes can be raised—but that is not only politically 212 unfeasible, it is also resisted on well-established grounds of conservative ideology...

...But is it a stable majority...

...the weakness of central public authority relative to private and local public interests...

...The] post-Vietnam fiscal dividend will either be significantly increased by policies that reduce military spending or it will be significantly eroded by further additions to that spending...

...suffice it to note that they are not wellfounded...

...It follows that Nixon will steer a careful "centrist" course so as to rally the "moderates" of both major parties...

...For the time being, Nixon's electoral victory has settled the question as to whether a conservative majority exists...

...True, the Vietnam War has accounted for most of the increase, but it is precisely the Vietnams which have become a yardstick of preparedness since the need for strong "conventional" forces was reemphasized by John Kennedy...

...In only three of the major states (Michigan, New York, and Pennsylvania) would the Republicans require more than half of the vote cast for Wallace to gain a majority in future national elections...

...finds itself, a role now perceived as a burden by many in the `Establishment...

...The Nixon Administration has shown some awareness of these dangers...

...Eckstein further postulated that much of the prospective growth in revenue must be used to reduce (or avoid) budget deficits, so as to slow inflationary trends...

...Electoral arithmetic does not give a conclusive "yes" to this question, but even if it did, it would slight the deeper problem of the constraints that will limit Nixon just as they did the Democrats...

...There has always been the implication that the dividend would not be subject to the pressures that established claimants exert on budgetary decisions—it would painlessly finance needed reform...

...It seems improbable that the Nixon Administration, any more than its H. BRAND predecessor, will redirect funds now expended on farm-price supports to more urgent needs...

...By enhancing farmers' financial solvency, price supports have contributed strongly to the rapid rise in agricultural productivity, and thus have been a key factor in displacing workers from rural areas...

...But it cannot be escaped and perhaps not even be lightened...

...Otto Eckstein, a former member of the Council of Economic Advisers, noted a year ago that it would be difficult to reduce defense spending after the Vietnam War—a prognosis now widely shared, chiefly because that is what the Pentagon wants...

...There may be no intermediate position...

...and that the strategic nuclear forces in themselves cannot be re lied upon to provide a credible deterrent or a reasonable response to the entire spectrum of aggression which we must be prepared to face...

...But Nixon's degree of awareness is not at issue here...

...which, though still narrow, can perhaps be enlarged...

...One of these is the big farmers...

...Nine southern states, which accounted for 13 percent of the total national vote for all three candidates, delivered 40 percent of the vote for Wallace...

...or that the decline in living standards in Asia, Africa, and Latin America can be reversed without massive counterefforts...

...It cannot be excluded, though I think it very doubtful, that by uniting the "moderates" of both parties, Nixon can impose his own version of such reforms...

...The] future budgetary consequences of present strategic policy may prove to represent an unstable equilibrium...

...In time that might compel him to reduce welfare-state expenditures and curb labor, perhaps even to sanction repression of basic liberties...

...NOT ONLY HAS President Nixon failed to tackle any major problem, he has not even defined one...

...Charles Schultze, a director of the Bureau of the Budget under Johnson, estimates in Agenda for the Nation that "roughly two-thirds of the $3.5 billion Federal price support costs (in 1966) accrue to the benefit of the top one-sixth of farmers who have average incomes of $20,000...

...but it also conciliated the military, which promptly obliged by modifying its stand in favor of a "thin" ABM network...

...Labor's political ascendancy was furthered by Roosevelt...

...Obviously, that will restrict already sparse funds for socially meliorative measures...

...Their restiveness arose from the need to sustain Democratic majorities...

...the Southern Negro's by Kennedy and, more energetically, by Johnson...

...In sum, following Eckstein, the fiscal dividend will be nearly or wholly absorbed by "conventional" requirements...

...The struggle for social priorities is therefore likely to move into the center of the political arena in the years ahead...

...Paramount among these constraints is the world role in which the U.S...

...Michael Harrington, in attacking the Republicans for wanting to give business a key role in antipoverty, has doc umented the perverseness of this approach (DISSENT, January-February 1969) . Yet in fact the Johnson Administration initiated it and emphasized it as an alternative to the massive federal programs proposed by labor and leftist liberals...

...Defense Industry Bulletin, March 1969 (2) In the course of establishing its "forward defense," the United States has incurred commitments to numerous nations, which could only be dissolved with great dif lculty, if at all...

...In 1968 Nixon received 3.3 million fewer votes than in 1960...

...Humphrey, 3.6 million fewer than John Kennedy...

...New York Times, March 19, 1969 Kennedy and Johnson, too, were finally compelled to hold to "the middle of the road," but they were a bit restive under the compulsion...

...By his lights, he will not need them since the elections of 1968 proved that there exists a quasi-conservative majority in the U.S...

...Economists' erstwhile optimism about a growing fiscal dividend has given way to measured pessimism...

...he] intends to wait to see how much spare cash his budget will yield before he begins to "move in the direction of our very difficult problems...

...it will quite possibly grow—well beyond that level in subsequent years...

...These assumptions cannot be analyzed here...

...But Nixon's economic policy rests on conventional Keynesian conceptions of regulating the business cycle: thus, the budgetary surplus projected by President Johnson for the fiscal years 1969 and 1970 is to be enlarged in order to combat inflationary trends more effectively...

...And the small margins by which Nixon won in New Jersey and Illinois could be increased by appealing to only a segment of the 1968 Wallace vote...

...10-15 percent of tangible (i.e., transportable) U.S...

...Such politics would accord with his appointment of Patrick Moynihan...

...Remember that the majority which carried Johnson into office in 1964 was so 210 huge, one might have thought it would per mit him wide latitude in interpreting his "mandate...

...If Nixon is even to begin resolving domestic problems, he must attempt to loosen these constraints...

...These constraints include the enormous claims made by military expenditures upon economic resources...

...At home...

...Nixon's immobilism will obstruct such counterefforts, thus making them all the more urgent...

...the) overall requirement for General Purpose Forces rests on two very funda mental policy judgments: that the security of our nation is inextricably bound up with a forward defense and, thus, with the se curity of our allies...

...I I F the ABM decision typifies Nixon's ap proach, it also suggests that by and large he will move within the same limits that were so severely tested under Johnson, and that have caused disintegration of the two-party system...

...Yet he proved unable to come to grips with social crises at home or to end the Vietnam War...

...The Republicans' assumption that a conservative majority exists and can be expanded has a measure of validity despite Nixon's loss in votes since 1960 and the likelihood that only part of the Wallace vote can properly be termed conservative (all of it must be considered racist...

...It has also been assumed that the substantial shift in spending, which a rising dividend would bring about from the private to the public sector and, within both, from fixed-investment outlays to consumer goods and services, would not slow the rate of economic growth—and that the producer interests likely to be affected by that shift would not view themselves as threatened by it...

...Offhand, the Wallace vote seems to have changed nothing in the basic alignment of two-party power...

...In resisting cuts or shifts in defense programs, these interests will adduce the technological imperatives that require ever new "generations" of weapons systems and therefore an escalating investment in ever more destructive, if useless, armaments...

...But it would be out of character for them, as well as impolitic, to appeal to the degraded populism of Wallace supporters...

...As Max Frankel has written: By this stage in their administrations John F. Kennedy and Lyndon B. Johnson were forging new designs for European organization or urban transportation and tax reform and slum removal to boot...

...They were combing the budget and eyeing new revenues to pay for what they wanted done, with freedom and justice and ballyhoo for all...

...the difficulties in trying to broaden the fiscal base...

...Wallace attracted the "protest" vote from both parties in roughly equal proportions...

...Paul McCracken, chairman of the Council of Economic Advisers, has spoken of the "narrow social tolerance" within which economic policy (particularly as it affects employment levels) must move in the current period...

...The hard facts are that ghettos are rotting, that poverty has become intolerable, that, in general, the moral authority of the government has been undermined, not only by its impotence in settling—and rationally defending—the Vietnam War, but also by its inability to cope with such elementary problems as hunger at home...

...Yet the H. BRAND Wallace vote was not merely sectional...

...Eckstein also thought that the costs of traditional civilian government outlays would continue to rise unabatedly, in line with population growth and demand for expanded public services...

...Will not a growing "fiscal dividend" enable Nixon, as it would have enabled a Democratic President, to deal with intractable social problems...

...therefore, it represents a great domestic political force...

...But he adds, If the military budget in the early 1970s is not substantially lower than the level implied by current policy...

...Nixon is surely aware of the dilemma before him—a dilemma Johnson was unable to resolve and which, in the form of sharpening conflicts over the distribution of social resources, has confronted politicians the world over...

...On the contrary, he shares their optimistic belief in enlightened capitalism and America's world role...

...But this belief presupposes that it is possible to entrench social immobilism in a period of deepening social conflict...