A Thousand Days
Page 120
Tax reduction, in short, was the first part of the assault on unemployment. After the artillery barrage, the structural troops were then expected to move in and mop up remaining pockets of resistance. A basis for structural action had already been laid by legislative enactment: the Area Redevelopment Act, passed in 1961 after having been twice vetoed in the Eisenhower administration, and the Accelerated Public Works Act of 1962. Both of these were put under the charge of William L. Batt, Jr., who had been Commissioner of Labor in Pennsylvania and was now head of the Area Redevelopment Administration in the Department of Commerce. In addition, the Manpower Training and Development Act was passed in 1962, and bills for vocational education and youth employment were moving through Congress in 1963.
Progress had also been made in devising regional strategies. The President directed Batt to work closely with the Conference of Appalachian Governors, organized in 1960 for a multi-state attack on the spreading economic decay in the hills and valleys of the Appalachian mountains. Appalachia, a region as large as Britain, stretching from northern Pennsylvania into northern Alabama, had been primarily a coal area. Now the mining towns were crumbling away. Unemployment was twice the average for the nation. The people were sunk in lethargy and squalor. Those of intelligence and energy, who might have provided local leadership, fled the region as fast as they could. On the Cumberland Plateau in eastern Kentucky 19 per cent of the adults could not read or write. Harry Caudill’s Night Comes to the Cumberlands in 1963, with its powerful portrait of life in the southern Appalachians, made the nation uneasily aware of the horror of underdevelopment it had hidden in its bosom. Caudill’s book came out with a foreword by Stewart Udall and was widely read in New Frontier Washington.
Kennedy, who never forgot West Virginia, followed developments in Appalachia with particular interest. This region, as he once put it, would be “very hard to reach even if the economy is going ahead at a strong rate.” From the start, he steered a great variety of government programs—ARA, highway construction, Army Corps of Engineers, TV A, food stamp—into Appalachia. In the spring of 1963 he established a joint federal-state Committee on the Appalachian Region and, with nice historical eye, appointed Franklin D. Roosevelt, Jr., the Under Secretary of Commerce, as chairman. Roosevelt took hold of the project with ability and energy. It seemed in 1963 that the Appalachia program might become a model for comparable programs in other parts of underdeveloped America, such as the upper Great Lakes region and the Ozarks.
Within the executive branch the President’s Committee on Juvenile Delinquency had been developing under Robert Kennedy’s goading perhaps the most imaginative attack on the structure of poverty. The Committee decided to use its funds—$10 million a year—to stimulate cities to come up with coordinated plans, uniting federal, municipal and private instrumentalities in an effort to help boys and girls in the slums. When the plans met the Committee’s criteria, more money would be available for their execution. In order to make sure that they would not just be schemes benevolently imposed by social workers and welfare agencies, Robert Kennedy insisted on bringing the poor into planning and execution—an innovation of great significance, stoutly resisted in many cases by city administrations. He also laid emphasis on pre-school education, pointing out that the formative years of a child’s life were before the age of six or seven and that many children from poor families arrived in the first grade so far behind that they could never catch up. The Committee concentrated on sixteen cities in the course of 1963 and approved plans in ten of them. Mobilization for Youth and the Haryou program in Harlem were among the best known. Out of this experience there emerged the concept of ‘community action’ as a fundamental part of the war against deprivation.
Yet, apart from the Committee on Juvenile Delinquency, none of the structural efforts quite worked. The Area Redevelopment Administration received inadequate appropriations and, because of political pressure as well as human need, had to spread them too thin over too wide an area. After a year and a half, only slightly more than 150,000 were in training under the Manpower Development and Training Act. The youth employment bill, proposing a Youth Conservation Corps, passed the Senate in April 1963 but bogged down in the House. And the Appalachia program threatened to be dominated by the state governors, who flinched from offending the absentee corporate owners of the area and wanted to put the bulk of government funds into highway construction.
8. THE WAR AGAINST POVERTY
As Kennedy reflected on these matters in the spring of 1963, he began to feel that the problem was one not only of greater investment in private industry but of greater investment in public services and human beings, not only of distressed areas but of distressed individuals, not only of vocational training but of elementary education, medical care, civil rights, community action and personal morale. He was reaching the conclusion that tax reduction required a comprehensive structural counterpart, taking the form, not of piecemeal programs, but of a broad war against poverty itself. Here perhaps was the unifying theme which would pull a host of social programs together and rally the nation behind a generous cause.
Kennedy knew that unemployment and poverty were in part separate problems (indeed statistics showed that a majority of the unemployed were not below the poverty line and a majority of the poor were not unemployed); but the problems overlapped in the area of structural remedy. This concern for poverty as a problem distinct from unemployment—for chronic or, in bureaucratese, ‘hardcore’ poverty—was relatively new. Franklin Roosevelt in his Second Inaugural had spoken of “one-third of a nation ill-housed, ill-clad, ill-nourished . . . lacking the means to buy the products of farm and factory and by their poverty denying work and productiveness to many other millions”; but, in the depression, he had the unemployed primarily in mind. The war made people think of other things. Then in 1949 the Joint Committee on the Economic Report established a Subcommittee on Low-Income Families, which began to demonstrate by statistical analysis the persistence of poverty in the national community. Two old New Dealers, Averell Harriman and Isador Lubin, were quick to see the significance of this work. In 1953, when Harriman became president of the Franklin D. Roosevelt Foundation, he decided to focus its program on the third of the Four Freedoms, Freedom from Want. By 1956, with Harriman now governor of New York and Lubin his labor commissioner, Harriman asked the legislature to set up a commission to study the causes and remedies of poverty. Harriman’s message to the Legislature on January 31, 1956, contained the basic elements of the war against poverty begun half a dozen years later. It defined the problem as something separate from unemployment and even from distressed areas, set.forth its composition and magnitude and laid emphasis on the need to help the individual make his own escape from poverty through “medical and vocational rehabilitation.” Leon Keyserling, another old New Dealer still in Washington, put out a series of well-documented papers discussing what he called “the gaps in our prosperity,” and the Joint Economic Committee continued its work on low-income families. But neither the statistics in Washington nor Harriman’s little New Deal in Albany had much impact on the comfortable fifties. Indeed, one of Nelson Rockefeller’s first acts as governor in 1959 was to abolish Harriman’s commission.
It was not till toward the end of the decade—and especially with the publication in 1958 of Galbraith’s The Affluent Society and its chapter xxiii on “The New Position of Poverty”—that chronic poverty began to impinge on the national consciousness as a distinct issue. Galbraith warned that the poor, unlike the ambitious immigrants of the nineties or the politically aggressive unemployed of the thirties, were now a demoralized and inarticulate minority who in many cases had inherited their poverty and accepted it as a permanent condition. Because of their apathy and invisibility they had ceased to be objects of interest to the politician. Nor would the increase of the gross national product of itself solve their problems. But he insisted that an affluent society, through investment in the public sector, could begin to take measures whic
h might at least keep poverty from being self-perpetuating. Then in 1962 The Other America, a brilliant and indignant book by Michael Harrington, translated the statistics into bitter human terms. If Galbraith brought poverty into the national consciousness, Harrington placed it on the national conscience.
Kennedy read both Galbraith and Harrington; and I believe that The Other America helped crystallize his determination in 1963 to accompany the tax cut by a poverty program. Galbraith’s unremitting guerrilla warfare in support of the public sector against “reactionary” Keynesianism certainly played its part too.* The Senate Subcommittee on Employment and Manpower, under the leadership of Joseph S. Clark of Pennsylvania, conducted a series of thoughtful hearings to determine what the proper ‘policy mix’ should be to achieve full employment. And the Council of Economic Advisers itself, amending its earlier emphasis on aggregate measures, provided a main stimulus to the new structural effort.
In the spring of 1963, Robert Lampman, who had conducted poverty studies for the Joint Economic Committee in 1959 and was now a member of the Council staff, brought his researches up to date. His data, as Heller explained in a memorandum to Kennedy on May 1, underlined the drastic slowdown in the rate at which the economy was taking people out of poverty. In spite of the remarkable increase in the gross national product, the absolute number of the poor appeared to be slightly larger than in 1957 and the proportion only 1 percent lower. By reasonable definitions—an annual income of $3000 for a family or $1500 for an individual—one-fifth of the nation lived in an underworld of poverty beyond the reach of most government programs, whether housing, farm price supports, social security or tax reduction.
It puzzled Kennedy that the poor were not angrier and more politically demanding. “In England,” he said one day in the spring of 1963, “the unemployment rate goes to two per cent, and they march on Parliament. Here it moves up toward six, and no one seems to mind.” But, as he said to Heller, the time had come for action. There were doubts in other parts of the government, even in Heller’s own staff. Ted Sorensen, however, told Heller, “This is the President’s kind of program. Go ahead on it.” Early in June Heller circulated a memorandum within the Council asking “what lines of action might make up a practical Kennedy anti-poverty program in 1964?” Through the summer and fall the Council carried on its work. During the cabinet meeting on October 29, 1963, the President scribbled, as usual, on a yellow lined pad; the doodles show the word “poverty” half a dozen times, encircled and underlined. On Armistice Day, 1963, Kennedy told Heller, “First we’ll have your tax cut; then we’ll have my expenditures, program.” One day in November, musing about the 1964 State of the Union message, he remarked to me, “The time has come to organize a national assault on the causes of poverty, a comprehensive program, across the board”; this, he suggested, would be the centerpiece in his 1964 legislative recommendations. On November 19 he observed to Heller that the middle class might feel threatened and we would have to do something for the suburbs, but the Council should go full speed ahead to get the program ready for 1964. Between tax reduction and the war against poverty, Kennedy believed that he had finally put together the elements of a total program for economic growth and opportunity.
Already the policies of the Kennedy years had resulted in the longest American peacetime expansion of the economy in the century of recorded business cycle history. The average increase of the gross national product in real terms was 5.6 per cent a year*—measurably more than the 5 per cent Kennedy had talked about in the 1960 campaign. Profits, wages and salaries were higher than ever before; yet costs and prices remained stable, and wage rates on the average rose no faster than productivity.
The sources of this triumph can be briefly enumerated. The steady rise in expenditures, averaging over $5 billion a year, contributed basic economic stimulus.** The investment tax credit and the liberalized depreciation allowances encouraged investment. The Federal Reserve Board followed the elections returns and, where the balance of payments permitted, pursued a policy of monetary ease. The guideposts and the steel fight restrained the wage-price spiral. Roosa’s legerdemain defended the dollar. Neither of the right-wing bogies of the fifties—the passion for a balanced budget or the fear of inflation—was allowed to abort the boom. Then the tax cut promised to infuse the body economic with new energies for consumption and investment and the poverty program to open the gates of escape from deprivation and squalor.
Dillon, describing these years as a “watershed in the development of American economic policy,” thus summed up their meaning:
They have borne witness to the emergence, first of all, of a new national determination to use fiscal policy as a dynamic and affirmative agent in fostering economic growth. Those years have also demonstrated, not in theory, but in actual practice, how our different instruments of economic policy—expenditure, tax, debt management and monetary policies—can be tuned in concert toward achieving different, even disparate, economic goals. In short, those years have encompassed perhaps our most significant advance in decades in the task of forging flexible economic techniques capable of meeting the needs of our rapidly changing economic scene.
It was, indeed, an unprecedented performance in economic management; and its success was due to Heller and Dillon, whose creative debates first illuminated the choices and then led to consensus, and above all to Kennedy, whose political instinct determined the timing of policies and whose intellectual leadership made them acceptable to the country.
The growing accord between Heller and Dillon expressed a convergence of opinion among most economically literate Americans.* So Business Week suddenly discovered that Keynesianism was not so radical after all; “it is, in fact, a new variety of middle-of-the-road conservatism.” Perhaps only a Wall Street banker could have enrolled the leaders of American business in the Keynesian revolution. Like Vandenberg’s conversion to internationalism in 1945, Dillon’s espousal of Keynesianism (though he did not much like to be called a Keynesian) was one of those timely actions which carried over the line thousands of others, who had too long been suppressing doubts about the laissez-faire verities. When Dillon retired as Secretary of the Treasury in 1965, leaving behind an appeal for tax reductions in the lower brackets, warnings against high interest rates and emphasis on the growing need for public services, his record and leadership were warmly praised on the floors of Congress by such liberal Democrats as Paul Douglas, Henry Reuss and even that scourge of bankers Wright Patman. Nor had the educational process been all one-way. The liberals learned things too—that measures to induce business investment, price stability and wage restraint, for example, were not all bad. It became a time, as Heller liked to say, of “the decline of the doctrinaire.”
The question remained of the extent to which the new ideas were penetrating beyond the still smallish circle of the economically literate. Though Wall Street was coming to accept deficits as a benign invention, Main Street still evidently regarded them as the work of the devil. The mythology about the sinfulness of federal spending and the wickedness of a growing federal debt had deep roots in the folkways. Heller, in a moment he was not soon allowed to forget, attributed this to “the basic Puritan ethic of the American people”; but, if so, it was a very peculiar Puritanism, for it permitted the people to indulge freely in all the vices—to unbalance budgets, to go into debt, to spend more than they earned—they would righteously deny their government. Indeed, consumer debt had increased about 1000 per cent since the war, while the national government’s debt had only increased 18 per cent. Perhaps Heller had Mencken’s view of Puritanism in mind: “The objection to Puritans is not that they try to make us think as they do, but that they try to make us do as they think.” In any case, so long as the national government itself continued to encourage the mythology—even Kennedy, to meet his congressional problems, used occasionally to talk about frugality in government as if the reduction of public spending were per se a good thing—the new economic policy could not be whol
ly secure.
The job of public education which Kennedy had begun so brilliantly at Yale was yet to be completed. Still, these years equipped the republic with policies which promised to advance economic growth, move toward full employment and relieve the age-old burdens of poverty.
9. ONE ACQUAINTED WITH THE NIGHT
On a beautiful autumn Saturday at the end of October the President flew to Amherst College in Massachusetts to take part in a ceremony in honor of Robert Frost. He had decided to speak about Frost’s inaugural theme of poetry and power. When we were talking over what he might say, we had chatted about Frost’s poems. He recalled “I have been one acquainted with the night” and said, “What a terrific line!”’ Now on Air Force One he worked over the speech some more and then joined Stewart Udall, James Reed, his friend of PT-boat days, now Assistant Secretary of the Treasury, and me in the forward compartment. The President’s mood was gay. Udall remarked that he feared a lady of his acquaintance, fanatically anti-Kennedy, might appear and even try to interrupt the ceremony, “so if you see me in the crowd struggling with a woman and rolling on the ground, you will know what is going on.” “In any case, Stewart,” the President said, “we will give you the benefit of the doubt.”
Soon we landed and motored over to the college. It was Indian summer, golden and vivid but with forebodings of winter. “The men who create power,” Kennedy told his Amherst audience, “make an indispensable contribution to the nation’s greatness, but the men who question power make a contribution just as indispensable . . . for they determine whether we use power or power uses us.” Frost, he continued, saw poetry as the means of saving power from itself. “When power leads man toward arrogance, poetry reminds him of his limitations. When power narrows the area of man’s concern, poetry reminds him of the richness and diversity of existence. When power corrupts, poetry cleanses.”