THE BEGINNIG OF HOPE
The Beginning of Hope The dominant theme of the victorious Kennedy campaign of 1960 was his promise to "get the country moving again." Armed with the hard facts of economic life—recession piled on...
...Too often we hold fast to the cliches of our forebears...
...The answer, we think, is that Mr...
...The steel industry is operating at less than sixty per cent of capacity...
...In a rather strained effort to convince his natural opponents that he is really their friend, President Kennedy has seemed to...
...Kennedy is committed, or has been up to now, to the kind of budget-balancing . fiscal orthodoxy that stunts growth and prevents progress...
...Erhard, "but we are not in the least like your Republicans or even like many of your Democrats...
...it also weakens the nation as a world force for peace and freedom...
...We subject all facts to a prefabricated set of interpretations...
...And, on the specific point of this editorial, Professor James MacGregor Burns, friendly biographer of the President, wrote earlier this year that Mr...
...The same has been true of us...
...Without them, cap...
...More than a decade ago, when the Adenauer regime was shakily trying out its young legs, the Editor of The Progressive interviewed both the Chancellor and his Minister of Economics—then and now—Dr...
...He has sought to appease the conservative forces in Congress, Republicans and Democrats alike, who have charged him with spending sprees and fiscal irresponsibility, by failing to fight for the very spending programs that Mtould lubricate our sluggish economy and get us moving again...
...Why the stagnation under an able, dynamic President who promised to get us moving again...
...Our national debt in 1947 amounted to 110 per cent of our gross national product—the total output of all our factories, farms, and shops—and we were in a boom...
...What moral does this hold for America...
...He said the same thing at the UAW convention at Atlantic City...
...ism cannot long survive as a healthy way of life...
...Unfortunately, all this has gone on with such good results for so long that the painful question arises of whether virtue and sin have not changed places...
...Business failures and mortgage foreclosures are rising rather than declining...
...But both emphasized repeatedly that true conservatism meant conserving the essentials of free enterprise through the kind of government collaboration that would build social services and public projects to provide for fiscal flexibility and economic expansion...
...Today, a year and a half after Mr...
...They cannot be solved by incantations from the forgotten past...
...Gunnar Myrdal, the celebrated Swedish economist, expressed this note briskly when he said recently: "I am convinced the world's greatest problem is how the hell to get America out of economic stagnation...
...But Mr...
...Here is the beginning of hope— the hope that President Kennedy will stop trying to butter up those who live by the incantations of the past, and that, instead, he will fight for the kind of progressive program that will get this country moving again...
...The level of capital investment for the current period, expected to increase fourteen per cent over 1961, will show an advance of only eight per cent...
...It is fifty-five per cent of our gross national product and our economy is weak...
...This, of course, is a far cry from the rigid rejection of government participation—except in the dispensing of some $50 billion worth of armament contracts—that marks the thinking of the American business community and the Right-wing politicians who dominate our Congress...
...It is clearly an unjust world that permits such economic sinners to go on getting richer and richer and at the same time permits them to take away nearly a billion dollars worth of American gold each year...
...It is significant, and somewhat ironical, that the West German Republic, perhaps the most prosperous and fastest growing country on earth—and the nation most venerated by American conservatives as their ideal of laissez-faire in action—devotes more of its national product to social services and public projects than any other country in the non-Communist world...
...Kennedy wished he could discover why Europe is so prosperous, and that he had been told the reason "again and again" but "he just won't listen...
...In the long run Europe may be doomed to suffer, but the long run seems to fade further and further into the distance...
...But the example of Western Europe shows that they are capable of solution—that governments, and many of them conservative governments, prepared to face technical problems without ideological preconceptions can coordinate the elements of a national economy to bring about unexampled growth and prosperity...
...You are weak in this confrontation," he said, "because you are stagnating...
...All of them have some nationalized industries . . . "Almost without exception, they take more from their people in all forms of taxation than does the United States...
...Howard K. Smith, in a brilliant telecast on government spending a month or so ago, pointed out that "Britain enjoyed her most prosperous growth when her national debt was highest...
...The stagnation of the American economy not only leaves ragged tears in the social fabric of our internal economy...
...the conservative de Gaulle government of France, thirty-two per cent...
...Kennedy, "the fiscal moderate . . . hesitates to take the strong steps necessary for full economic growth while seeing the long-term need for it...
...American public spending—local, state, and national—is at the bottom of the list— twenty-six per cent of our gross national product...
...For the great enemy of truth," he said, "is very often not the lie—deliberate, contrived, and dishonest—but the myth—persistent, persuasive, and unrealistic...
...Kennedy ridiculed by word but to which he still clings in deed...
...Senator Richard B. Russell, Georgia Democrat, one of the shrewdest of the conservatives in Congress, observed with satisfaction recently that "the President is much more conservative than his inner circle of advisers...
...Both were, and are, regarded as unassailable conservatives...
...First, and by all odds foremost, their governments never balance their budgets—at least as Americans understand the term...
...to the effect that Mr...
...The trouble is, Kennedy has been told the reason again and again...
...We conceive the role of government as one of partnership with industry and labor in pursuit of a common national goal, which is an expanding economy in which all can share fruitfully...
...There are brilliant men in and around the White House who have counseled a bolder and more imaginative course than the President has pursued...
...But he just won't listen...
...Happily, there are signs that the President has begun to listen...
...Europe is now in its fourth consecutive year without the shadow of a recession and looks like repealing the business cycle altogether...
...The continental Europeans, in fact, are doing in economics what any sensible man knows is impossible: they are spending themselves rich...
...He has sought to placate the business community by posing, hopelessly, as a budget-balancer...
...Today, our national debt is half that proportion...
...In his superbly phrased address at Yale last month, the President struck hard at the ancient myths and worn-out slogans that clutter our thinking and cripple our progress...
...Government intervention is natural and necessary, and public spending and planning, within reasonable limits, are essential ingredients of that concept...
...That's far more important than Laos or Berlin that fills your newspapers...
...More awful still, they do their best to avoid surpluses in these budgets...
...Armed with the hard facts of economic life—recession piled on recession under the Republicans—Candidate Kennedy struck out eloquently against the stagnant state of our economy, its sluggish rate of growth, the continuing high level of unemployment, the shocking under-employment of our productive capacity, and the climbing rate of business failures and mortgage foreclosures...
...yet, unaccountably, incentives have not been dulled and risk capital has not dried up...
...Government spending in European countries rises giddily year after year...
...If the United States had a growth rate of five to six per cent a year, instead of the three per cent average since World War II, said Dr...
...Western Europe, which is enjoying unparalleled prosperity and has had no recession during the same period we have had four, has abandoned the myths which Mr...
...Earlier, we quoted T.R.B...
...Their economic sins are almost unspeakable...
...We are conservatives," said Dr...
...Why...
...Ludwig Erhard, in Bonn...
...Western Europe, in short, is not afraid of public spending to build prosperity and achieve social goals...
...T.R.B., the gifted Washington columnist for The New Republic, recently reported that the President "wistfully told a group from the Committee for Economic Development that he wished they would find out why Europe is so prosperous...
...Myrdal, a great friend and admirer of America, our hand would be immeasurably strengthened in our negotiations with the Communists...
...We enjoy the comfort of opinion without the discomfort of thought...
...In a lightly satirical essay on the subject, The Economist of London contributed some reflections we think well worth passing on: "By all the truths Americans have lived by, the continental Europeans must be in for dire trouble...
...In his Yale address, after raising most of the more disturbing social and economic questions of our time, he went on to say: "These are the problems we should be talking about—the real problems of our age...
...embrace some of their anti-spending, budget-balancing slogans when, in fact, his job must be to lead them, or, if need be, to drag them, even as they kick and scream, onto higher levels of prosperity through the development of the kind of programs of public planning and spending that have brought such unparalleled prosperity to the "conservative" Old World...
...The most striking fact about the contrast between the governments of Western Europe and that of the United States is that they are thought to be conservative regimes and we are felt to have a liberal Administration...
...the Tory government of Britain, twenty-nine per cent, and the moderately conservative government of Italy, twenty-eight per cent...
...Unemployment remains disturbingly high— five and a half per cent of the work force...
...It has discovered in practice what Keynesian economists long ago projected in theory—that there are times when an unbalanced budget makes for economic vitality and a balanced budget for economic sluggishness...
...Kennedy has been victimized by the very myths and cliches against which he warned...
...Kennedy assumed the powers of the Presidency, there are a few significant and many minor improvements in some segments of the economy, but the forward surge of the campaign promises has settled into a performance of such torpid advance that it is hardly distinguishable from the level of progress under the Eisenhower Administration...
...Yet Chancellor Adenauer's ultra-conservative government devotes thirty-four per cent of its annual national product for social needs...
...With their economy rolling along at a growth rate two and a half times our own, the statesmen and businessmen of Western Europe are violating every maxim in the copybook of orthodox American economics—and doing more handsomely every day as a consequence...
...I believe deeply in the free enterprise system, but I believe, too, that only through the prudent use of public spending and planning can the system live and grow...
Vol. 26 • July 1962 • No. 7
