THE TRIUMPH OF THE ACTIVIST STATELinks for the Study of Presidents Franklin Roosevelt through Lyndon Johnson
THE CONFLICT BETWEEN LIMITED GOVERNMENT AND THE ACTIVIST STATE
FDR AND THE ACTIVIST STATE
FDR on Activist Government
FDR on Class ConflictTHE CONSERVATIVE COALITION AND THE LIMITED INTEREST STATE
Truman on the Employment Act of 1946
Dwight Eisenhower on the Role of GovernmentLYNDON JOHNSON AND THE GREAT SOCIETY
Lyndon Johnson on the War on Poverty
1964 Republican Presidential Candidate Barry Goldwater on Limited GovernmentLinks for the Study of Presidents Franklin Roosevelt through Lyndon Johnson
THE CONFLICT BETWEEN LIMITED GOVERNMENT AND THE ACTIVIST STATE
back to topThe Emergence of the Activist State
The next several chapters examine changes in presidential administrations, political philosophy, public policy, and party politics. This chapter covers domestic policy from the beginning of the twentieth century through the presidency of Lyndon Johnson, giving particular attention to the New Deal of Franklin Roosevelt and the developments in domestic policy since then. The twentieth century brought the triumph of the philosophy of activist government over the previously dominant doctrine of the limited state. Along with the ideology of the activist state came the doctrine of the activist presidency. As the twentieth century progressed, the president was increasingly expected to devise programmatic responses to the problems that the nation faced.
In this period there were four bursts of expansion in the size and scope of government mixed with longer periods of general maintenance of the status quo. The principles of activist government and an activist presidency were first established in the era of Progressive reform that ran from 1900 to 1916. Theodore Roosevelt and Woodrow Wilson exerted strong presidential leadership to achieve the Progressive agenda of using government to control monopoly power and the worst excesses of unregulated corporate capitalism.
The Great Depression of the 1930s was the stimulus to the most significant expansion of presidential power and government involvement in the domestic economy. The administration of Franklin Roosevelt began the development of the American welfare state. In the 1940s, during World War II and the cold war that followed, FDR, and his successor Harry Truman, established the other major component of contemporary American government, the warfare state, or the military-industrial complex, as it has been called by its critics. The final burst of growth of U.S. government came in the 1960s under Lyndon Johnson, when the welfare state was expanded as a response to the racial conflict and heightened concern about social justice of that era.
But despite their historic significance, these periods were more the exception than the rule. The more characteristic pattern of public policy, particularly since the 1950s, has been slow, incremental growth of government, accompanied by some lesser paring of more politically vulnerable programs.
The Progressives and the Rise of the Activist State
The dominant public philosophy in the nineteenth century was limited government, although public policy was never been wholly consistent with this doctrine. The philosophy of limited government did not stop politicians from taking activist measures to aid the railroads and other key industries, nor to use police and even military force to strike against the rising trade union movement, to take just two examples. But even if the policies they pursued were often out of step with their rhetoric, presidential administrations throughout the nineteenth century, and particularly in the last third of the century, preached the doctrine of limited government.
Of course there were periodic challenges to the ideology of the limited state throughout the nineteenth century. For example, in the 1880s Congress had passed the Sherman Antitrust Act and the Interstate Commerce Act to limit the power of huge industrial corporations.
Senator Benjamin (Pitchfork) Tillman of South Carolina
was a leading Populist critic of monopoly capitalismIn 1896 the populist crusade of William Jennings Bryan against the dominance of industrial capital threw a real scare into the eastern political establishment. Bryan tried to unite southern and western farmers with northern workers and immigrants to contest the industrial interests, but in the end his challenge was beaten back. However, building on many of the themes of Bryan's populism, the Progressive movement had much more influence on public policy. The Progressives represented a different coalition, one between the urban middle class and western farmers, both of whom were critical of the excesses of unregulated capitalism. The Progressives fused the moral indignation of American Protestantism with nineteenth-century faith in science and progress to form the doctrine that economic and political systems could be reformed by men of goodwill.
As the twentieth century began, the Progressives' influence was first felt in the administration of Theodore Roosevelt, who became president when McKinley was assassinated in 1901. In contrast with his predecessors, Roosevelt believed in a highly visible, highly activist presidency and in active use of government to reform the excesses of corporate capitalism. Early in his term Roosevelt prosecuted one of the biggest trusts for violating laws against monopoly practices. He also took on the railroads, the symbol of corporate arrogance, in a series of legislative acts designed to regulate their rates. He supported the creation of the forerunner of the Food and Drug Administration, which checked the unhealthy practices of the meat-packing industry and regulated the quality of medicinal drugs. His administration made efforts to conserve natural resources by protecting them from uncontrolled exploitation by industry.
Following the precedent that informally limited presidents to two terms, Roosevelt stepped down in favor of William Howard Taft as his party's nominee in 1908. But after a few years of enforced retirement, he attempted to recapture the presidency in 1912 by running on the Progressive Party ticket. This split the Republican vote and led to the election of only the second Democratic president since the Civil War, Woodrow Wilson. Wilson, like Roosevelt, was in tune with the Progressive movement, and another wave of reform was begun in his first term.
President Wilson in Mobile, AlabamaWilson attacked the monopolies on two fronts. The Clayton Antitrust Act put new limits on trusts. But monopoly practices had proven so difficult to define legally and new practices inevitably arose when old ones were banned. So the Federal Trade Commission was created to be an ongoing watchdog of corporate practices and to develop new regulations to meet the evolution of corporate monopolies. The Federal Reserve Board was created to regulate the banking industry and to control the money supply. New legislation expanded farmers' access to credit. Protective tariffs that had shielded U.S. business from international competition were slashed. A national system for compensating workers injured in industrial accidents was devised. New laws banning child labor were passed. However, Wilson's first term proved to be the final burst of Progressive reform at home. War broke out in Europe, and Wilson's second term was consumed by fighting the war and negotiating the postwar peace. In 1920 the Republicans swept back into power, promising a return to normalcy, which meant a return to the limited state.
Yet the Progressive era had been historically significant. It had established the twin precedents of using activist government to regulate economic and social forces and presidential activism in pursuit of these goals. However, the effect of the Progressive reforms on the power of industrial capital can be overstated. Many of the reforms actually worked in favor of corporate interests. To take just one example, the Federal Reserve Board did more to rationalize the control of big banks over the financial world than to democratize financial institutions. Still, the precedent of governmental activism set in the Progressive period had continuing impact on American government.
FDR AND THE ACTIVIST STATE back to top
Action in the Economic Crisis
The prosperity of the Roaring Twenties proved more powerful than the reform impulse, and the presence of conservative Republicans Harding, Coolidge, and Hoover in the White House meant a revival of the doctrines of isolationism and the limited state. Coolidge perhaps captured the spirit of the times best when he said, "The business of America is business."
But in 1929 the stock market crashed and suddenly the Great Depression swept over the land. Prosperity was a memory as the United States faced the worst economic crisis the country has ever known. All over the country family fortunes and family farms were being lost, corporations were going bust, and working people were being thrown out on the streets. Nearly one of four workers was unemployed, and economic output was half of what it had been before the stock market crash. The previously dominant public philosophy of letting the market work was not working.
Many families were forced from their homes and farms and during the Great Depression
(most images in the rest of this chapter are linked to the web site of origin)Being in power, the Republican Party absorbed the blame for the Depression. In the congressional election of 1930, literally hundreds of Republican legislators were swept from power as Democrats took control of the House of Representatives. In 1932 the Democrats nominated Franklin Delano Roosevelt, a relative of Theodore Roosevelt, as their presidential candidate. The election gave Roosevelt a resounding mandate for change. Not only did he win in a landslide, but the Democrats won by margins of almost three to one in the House of Representatives and almost two to one in the Senate. FDR recognized that the country expected active leadership from the White House to tackle the economic crisis.
FDR embarked on many programmatic innovations, which he called the New Deal, in order to try to lift the country out of the throes of the Depression. In its first hundred days in office, the Roosevelt administration passed emergency legislation reforming the banking and securities systems, establishing national recovery planning for industry and agriculture, beginning public works projects to put some of the unemployed to work, and providing relief for some of the unemployed and impoverished. Later in his first term, in what has been called the second New Deal, FDR won legislation establishing social insurance for the elderly and unemployed, and protecting the rights of workers to organize trade unions and bargain with employers.
The Civilian Conservation Corps provided public works employment for the joblessFDR never really had a comprehensive theory to justify the actions he took in expanding the functions of government so dramatically. He was a pragmatist at heart, taking up problems as they presented themselves and seeking what he thought were reasonable solutions. But over time the philosophy of the New Deal revealed itself in the choices the administration made in trying to revive the faltering economy.
Three key elements can be seen in the policies of the early FDR presidency: economic stabilization, economic planning, and social reform. Each of these policy goals reflected a deeper philosophical basis. Many economic stabilization measures, such as the restructuring of the banking system, were based on the ideology I have called the social security philosophy, the belief that major sectors of the economy should be protected from large losses of income. New Deal legislation for industrial recovery reflected a belief that joint government and corporate planning would lead to more rational economic development than would unregulated free markets. The recognition of the rights of trade unions and strengthening of their bargaining position with owners reflected a belief that government had the obligation to protect and foster the democratic rights of working people in the economy and society.
The most immediate crisis the Roosevelt administration faced was the crisis in the banking system. The Depression had led to a number of bank failures as withdrawals ran far ahead of new deposits. The panic fed on itself as depositors worried about the security of their savings rushed to remove their funds before their bank became the next to fail. Upon taking office, FDR issued an executive order closing the nation's banks. He then submitted emergency legislation to Congress to pump new credit into the system. The first hundred days also brought legislation to provide federal guarantees of bank deposits through a government insurance system, new federal regulation of the securities industry, federal assistance for the refinancing of home and farm mortgages, and abandonment of the gold standard.
One of the most important products of the tumultuous first hundred days of the Roosevelt presidency was the National Industrial Recovery Act (NIRA). NIRA envisioned a restoration of prosperity through the organization of industries into associations of producers. These "modern guilds" would mutually agree to maintain existing production and price levels. They were designed to stem the tide of layoffs and deflation, and to preserve aggregate production and demand levels. This was the president's plan to return economic activity to pre-1929 levels.
The National Recovery Administration tried to maintain production and price levelsFDR also moved to stabilize the farm economy. In the 1930s one-third of the population was still working in agriculture. The most important farm bill was the Agricultural Adjustment Act (AAA), which sought to raise farm prices by curtailing production. This was to be accomplished by committees of local farmers who would apportion crop allotments among themselves. This was a kind of agricultural equivalent of the NIRA. The AAA also attempted to keep farm prices up by government guarantees. If farmers could not sell their products on the open market, the government would buy them for a predetermined price. In addition, the Farm Credit Act assisted farmers with mortgages and set up a system of regional rural banks to provide new credit to farmers.
The Depression had thrown millions of people out of work. While the Roosevelt administration sought to revive industrial and agricultural production, it also had to deal with the army of unemployed. The old system of private charity and relief by state governments was overwhelmed by the Depression. The Federal Emergency Relief Administration was created to expand the relief system by making grants to state and local agencies.
New Deal planners tried to combat unemployment and boost national economic production through public works projects that provided employment and increased purchasing power for workers and new facilities for communities. Federal public works programs went through a series of administrative evolutions due to shifting political and budgetary tides, but the purposes of public job creation remained the same. Public construction projects included roads and highways, airports, schools, parks, water and sewage systems, power plants, and shipbuilding for the navy.
The epitome of the New Deal public works philosophy was the Tennessee Valley Authority (TVA). The TVA was an ambitious public project for multipurpose regional development. Its responsibilities included hydroelectric power generation, fertilizer production, flood control, soil and forest conservation, land use planning, and raising living standards in one of the poorer rural regions of the country. The TVA was a visionary model for public planning for regional development. But it was only the largest of a series of measures aimed at rural revival that included the Civilian Conservation Corps, the Soil Erosion Service, and the Rural Electrification Administration.
The TVA provided electricity to millions of families and businessesWhile FDR's new activist programs were not successful in ending the Depression, they were politically popular. In the midterm election of 1934 the Democrats added to their massive majorities in Congress.
In 1935 the New Deal entered a new phase, turning to issues that had been deferred because they were even more politically contentious than the questions that had been addressed. While in the first hundred days the Roosevelt administration had dealt with the industrial and farm crises, it had not faced the demands of organized labor and the organized elderly. Trade unions and associations of the unemployed had been growing rapidly as wages and employment remained at low levels. Many elderly had joined groups that pressed for government pensions for those too old to work.FDR on Activist Government
Second Inaugural Address: We recognized a . . . need to find through government the instrument of our united purpose to solve for the individual the ever-rising problems of a complex civilization. Repeated attempts at their solution without the aid of government had left us baffled and bewildered . . . we knew that we must find practical controls over blind economic forces and blindly selfish men.
The NIRA: It represents a supreme effort to stabilize for all time the many factors which make for the prosperity of the nation. . . . Its goal is the assurance of a reasonable profit to industry and living wages for labor.
. . . [It] proposes to our industry a great spontaneous cooperation to put millions of men back in their regular jobs.
Social Security: The establishment of sound means toward a greater future economic security of the American people is dictated by a prudent consideration of the hazards involved in our national life. . . . We can eliminate many factors that cause economic depression, and we can provide the means of mitigating their results. This plan for economic security is at once a measure of prevention and a method of alleviation. back to top
In 1935 Congress and the Roosevelt administration responded with the passage of the Social Security Act which expanded federal relief aid, set up a national system of unemployment insurance, and, most important, began a national system of old age insurance. The Social Security program ensured the income of workers after they retired. The government would now tax an individual's income while he or she was in the work force, and keep the revenues in a separate fund. Benefits would be paid to retired workers, based on how much they had paid into the fund while they were working.
In 1935 Congress also passed the Wagner Act, which for the first time in U.S. history conclusively guaranteed the right of workers to organize into trade unions and bargain with employers over wages and working conditions. It set up the National Labor Relations Board to oversee the collective bargaining process between unions and management. The Wagner Act banned or regulated many of the most successful tactics companies had used to divide and conquer their workers. Most important, it mandated that if a majority of workers endorsed a union as their representative, it would be the sole bargaining agent for all the workers in the bargaining unit. This undercut past company practices of splitting their work force by treating nonunion workers better than union workers or workers in company unions better than members of more militant unions.
Steering Between Class Conflict and Economic Cooperation
The massive changes in policy and philosophy of the New Deal did not come without intense opposition and conflict. During the Depression crisis FDR was not averse to pointing to the class cleavages of American society and the economic forces behind the political conflicts over the New Deal.
Opponents of the New Deal assailed it as socialism, as undermining the very foundations of the American constitutional system and American capitalism. This certainly is not what the Roosevelt administration intended. In crafting their coalitions in Congress and administering the new programs, the New Dealers employed a rhetoric of joint effort of all elements of American society in the national effort to restore prosperity.
The NIRA sought the cooperation of business in the maintenance of industrial production. The AAA sought the cooperation of large and small farmers in the maintenance of crop prices and agricultural production. The reforms in the financial system kept the private banking and securities systems largely intact. The intent was to save the system, not to revolutionize it. But conservative opponents of the New Deal were not persuaded. They saw the new aggregation of power at the federal level as inevitably leading to total government control of the economy and society.
The New Deal also faced attack from growing radical movements on the left. Millions of workers were joining trade unions or associations of the unemployed. Dispossessed farmers were another source of militant discontent. Many intellectuals, even a few within the administration, saw the planning mechanisms of the New Deal as a wedge for developing new institutions of public power that could challenge the dominance of private economic institutions. But most New Dealers saw their reforms as a middle course between revolution and reaction.
Police confront workers in the
San Francisco General Strike of 1934Roosevelt was not averse to confronting his opponents on the ideological front. In his first inaugural address he reflected the popular resentment at the prior generation of economic and political leadership, which had allowed the crisis to deepen and had resisted the use of government to redress the suffering it had caused.
In preparation for his first reelection campaign, FDR renewed the attack on the old elite and the old order. In his speech accepting the Democratic nomination for a second term, he labeled his opponents on the right "economic royalists." FDR also had harsh words for his opponents on the left, but he saw them as less of an immediate threat.
The theme of class conflict was not unknown to the Democratic Party. The populist William Jennings Bryan, who had led the Democratic ticket in three unsuccessful presidential campaigns at the turn of the century had tried to unite discontented farmers and workers against the dominance of industrial interests. Bryan had crystallized resistance to the power of banks and trusts when he castigated them for "crucifying mankind on a cross of gold." FDR's skewering of the "economic royalists" captured the same resentments of the economic system that had failed so many so tragically.The royalists of the economic order have conceded that political freedom was the business of Government, but they have maintained that economic slavery was nobody's business. They granted that Government could protect the citizen in his right to vote, but they denied that the Government could do anything to protect the citizen in his right to work and his right to live.
Today we stand committed to the proposition that freedom is no half-and-half affair. If the average citizen is guaranteed equal opportunity in the polling place, he must have equal opportunity in the market place.
These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power.
Government in a modern civilization has certain inescapable obligations to its citizens, among which are protection of the family and the home, the establishment of a democracy of opportunity, and aid to those overtaken by disaster.
Governments can err, Presidents do make mistakes, but the immortal Dante tells us that divine justice weighs the sins of the cold-blooded and the sins of the warm-hearted in different scales.
Better the occasional faults of a Government that lives in a spirit of charity than the consistent omissions of a Government frozen in the ice of its own indifference. back to top
New Priorities in the Second Term
Roosevelt largely had his way in his first term, buoyed by the ratification of his policies in the midterm election of 1934 and his landslide reelection in 1936. But the New Deal and its expansion of government programs ran into more serious trouble in his second term. On the one hand, the New Deal lost momentum because it had not met its primary goal, ending the Depression. On the other hand, its political and social successes eased the crisis atmosphere that had made the country so responsive to urgent action and rapid change.
FDR also spent valuable political capital battling with the Supreme Court, which was still dominated by laissez-faire Republicans. Since the Civil War the Supreme Court had been the bastion of the theory of limited government, striking down all kinds of national and state regulation of the economy as unconstitutional extensions of government power. In 1935 the Supreme Court declared the NIRA invalid because it too broadly delegated Congress' constitutional powers to the executive branch. The Roosevelt administration had largely lost faith in NIRA as a mechanism for restoring prosperity and so was not unhappy with its demise. But it was determined not to let the Court put the entire New Deal in jeopardy.
In retaliation, Roosevelt took advantage of the fact that the number of justices who sit on the Supreme Court is determined by Congress, and proposed to increase their number. Since the president appoints justices with the confirmation of the Senate, this would allow Roosevelt to pack the Supreme Court with supporters of the New Deal and end the court challenges to his program. However, in many quarters this was seen as an unprecedented attack on the independence of the judicial branch, and the court packing scheme was opposed even by many of FDR's supporters.
Two views of FDR's plan to increase the number of Supreme Court Justices The Supreme Court ultimately backed down before the court packing scheme came to a vote by ruling in favor of the administration in some key cases. But the court packing scheme it took to achieve this cost FDR dearly in political terms. The Republicans picked up 75 House seats and 7 Senate seats in the 1938 election, which decisively shifted the political balance away from new government activism.
As New Deal reformism bogged down, the attention of the administration turned abroad. The outbreak of war in Asia and then in Europe shifted the nation's primary concern from domestic to foreign policy. In order to achieve his foreign policy objectives, FDR recognized that he had to mend fences with his opponents in the business world. By 1939 the United States was beginning to mobilize for the possibility of war. This required coordination between political and military leaders and big business to develop the mechanisms for war production. Early attempts at coordination included the National Defense Advisory Commission, the Office of Production Management, and the use of the Reconstruction Finance Corporation to subsidize defense-related industries.
Several key elements of the new cooperation between business and the Roosevelt administration were worked out during this period. Contracts were to be let on a basis of incurred cost plus profit, thus effectively guaranteeing a profitable return. War industries were granted massive tax breaks, such as accelerated depreciation of their investments. FDR promised to block any excess profits taxes on windfalls from war production. Private risks incurred in war production would be underwritten by federal credit guarantees.
When the Japanese attacked Pearl Harbor, the problem of war production intensified. Early in 1942 the War Production Board was created to oversee all military-related production. The administration and the business community were now united in pursuing the war effort, although conflict over the tactics of war mobilization could not be entirely eliminated.
The war effort replaced social reform in the later FDR years
WHAT KIND OF ACTIVIST STATE? back to top
The New Deal and the war production efforts of the Roosevelt administration represented a conclusive triumph of the activist state over the philosophy of the limited state. But it is important to see clearly what were the main components of this new activist state. The policies of the New Deal had three basic elements: economic stabilization, economic planning, and social reform. Behind these policies stood a more basic philosophy.
Behind many of the economic stabilization measures lay the principle of securing the income of many of the key sectors of the economy from large losses, or what in Chapter 2 was called the social security ideology. Behind the planning mechanisms of the New Deal lay the belief that corporations and government working together could rationalize economic production. The programs of the first hundred days were a mix of the social security philosophy and corporate planning.
The banking reforms, the NIRA, and the AAA all fused the goal of securing the income of the major sectors of the economy with the technique of joint corporate and government planning. Bankers, farmers, and industrial producers would organize self-regulating cartels and work together with government to ensure their income streams. The public works and relief programs served the same function by restoring income for unemployed workers. This combination of programs extended economic security programs broadly throughout society.
The Social Security Act of 1935 represents another elaboration of the philosophy of protecting the income stream of major sectors of society, in this case the elderly and the unemployed. These social insurance programs stabilized the income of workers over time, protecting them from the effects of temporary unemployment in economic downturns and providing a minimal pension once they were too old to work.
The other major philosophical component of the New Deal was social democracy, the redistribution of power and income. FDR often employed the ideal of social democracy in his rhetoric, although most of the programs of the New Deal sprang from less visionary origins. But certain New Deal programs did redistribute power or income. For example, the Social Security Act had the effect of redistributing income, not across class lines but across generational lines.
Perhaps the most clearly social democratic of the New Deal programs was the Wagner Act, which recognized the rights of trade unions in the workplace. It substantially altered the balance of power between capital and labor in the marketplace, ending the historic policy of using government power to suppress the trade union movement.
The TVA also had elements of social democracy in its makeup. In some ways the TVA was simply a huge public works employment program. But, unlike most other planning in the New Deal, the TVA program asserted the primacy of public power over private power. The TVA was a public corporation, and its planning mechanisms provided for input not only from local industrialists but also from small farmers and businesses, local residents, and others affected by the project. Its goals included not only making a profit but also leading and shaping the economic development of an entire region.
With regard to domestic policy, the FDR era can be broken into three periods. In each period there was a different relative emphasis on elements of the activist state. In the first two years, the emphasis was on economic stabilization and planning. The first hundred days sought primarily to secure the income of major sectors of society and establish mechanisms of corporate planning.
The "second" New Deal of 1935 combined elements of the social security philosophy with social democracy. The legislation of this period dealt more broadly with securing the income of working people and redefining the power relations between labor and capital. After the defeat of his court packing scheme and the swing to the right in the 1938 midterm election, FDR largely abandoned domestic reform in order to prepare for the war in Europe. In this period a new form of corporate planning took center stage, planning for war production.
The policy outcomes of the FDR years irrevocably changed the nature of U.S. government. Many of FDR's initiatives survive today as major government programs, either in their original form or modified over the years. Others were abandoned as the years passed and left no lasting mark on public policy.
Programs reflecting the social security ideology had the highest rate of survival and growth. The Social Security program established in the 1930s is now the single biggest government program, providing hundreds of billions of dollars in benefits to over 30 million recipients. The multibillion-dollar savings and loan rescue legislation passed in 1989 was an elaboration of the system of banking insurance established during the New Deal.
Programs based on the philosophy of corporate planning fared less well. Government planning for industrial policy and comprehensive national public works programs like TVA have long since been abandoned as public policies. Corporate planning has survived where it had been put in the service of social security goals. So today certain sectors of the economy still engage in sectoral planning. Agriculture still operates on the government subsidies, protection, and planning established in the FDR era. The close cooperation between military contractors and the Defense Department established during World War II continues today. But this kind of planning is quite different from the more general national industrial policy envisioned by the NIRA. Instead, the government-business planning mechanisms that have survived are those which put government power at the service of particular sectors of the economy, promoting and subsidizing one set of economic interests.
In terms of the typology introduced in Chapter 2, the New Deal promises of social democratic transformation and security for all segments of society were only partially fulfilled. Instead, a limited number of interests were secured. Financial institutions were shored up and their operations insured by the government. Large parts of the agricultural community were protected from the worst vagaries of the market. Organized labor had its rights to collective bargaining recognized and protected. Those who had been a regular part of the work force had their earnings partially protected from the effects of unemployment and a minimal pension ensured.
But the social democratic, redistributional rhetoric of the New Deal was largely unrealized. Unemployment and poverty persisted as social problems long after the economy recovered. The trade union movement was channeled into narrow concerns about wages in single industries. Minorities and women remained largely relegated to peripheral roles in the economy and society. The minimal welfare state of the New Deal did a better job of protecting the position of unionized workers and the income of higher-earning workers during recessions and at retirement than it did of advancing the interests of workers in more marginal positions. The activist state was effectively confined to a limited number of social roles.
THE CONSERVATIVE COALITION AND THE LIMITED INTEREST STATE back to top
From 1938 on, and particularly from 1946 into the 1960s, Congress was dominated not by the liberal New Deal Democrats, but by the "conservative coalition," the alliance between conservative southern Democrats, who controlled most of the key congressional committee chairs, and conservative Republicans. The watering down of the provisions of the full-employment bill in 1946, the passage of the Taft-Hartley Act in 1947 with its restrictions of the power of unions, and the McCarthy anticommunist witch-hunts in the 1950s reflected this conservative dominance of Congress.
Democratic President Turman vetoed the anti-labor Taft-Hartley Act
but the conservative coalition in Congress passed it over his vetoThe 1940s and 1950s was a period of greater attention to international affairs than to domestic reform. Most expansion of government programs during this period came in the military and intelligence agencies that were part of the new national security apparatus. From 1940 through the early 1960s, more than half of all government expenditure was on the military and security apparatus.
Roles of Government and Conflict over the Full-Employment Bill
The postwar political environment was inimical to expansion of domestic programs. The philosophy of the activist state had taken firm hold, and many of the new roles that the state had taken on in the 1930s survived the war and the postwar recovery. But in the postwar years the doctrine that the government should take on only a limited, if now expanded, set of roles rebounded ideologically.
The renewed power of the ideology of the limited state can be seen in the watering down of the Employment Act of 1946, which was designed to deal with an economy demobilizing from the massive war effort. The war had ended the Depression, and it was now feared that the end of the war would bring the return of hard times. Sponsors of the original full-employment bill sought to counteract any contraction of the postwar economy through economic planning and large-scale public works and public employment projects if the private economy failed to maintain high employment and production levels.
Sponsors of the full-employment bill were acting from a New Deal-like mix of philosophical principles. Most important, they wanted to broadly secure the income streams of working Americans. Many backers of the bill also wanted comprehensive national economic planning to overcome the tendency of the market economy toward severe cyclical fluctuations and periodic depressions. Some of the bill's supporters also sought to establish the principle of democratic public steering of the economy over the primacy of private interests.
Many conservatives opposed the full-employment bill on pure free-market grounds. But the more politically tenable position was to try to limit the scope of the bill. The conservative alternative to the full-employment bill recognized the federal government's role in macroeconomic stabilization, in trying to keep employment and production up and inflation down in the postwar period. It accepted the creation of the Council of Economic Advisers to give the president expert opinion on how to use fiscal and monetary policy to achieve these goals. But the conservative alternative struck from the bill provisions for comprehensive economic planning, public works and public jobs, and any idea of supplementing the private sector with public power. It even purged the bill of any reference to the term "full employment."
It was this conservative alternative that formed the basis of the Employment Act that won passage through Congress in 1946. In perhaps the most important political test of the early postwar period, the principle of limiting the scope of activist government had prevailed over a more expansive vision of activist government.
Eisenhower and the Republican Acceptance of the Activist StateTruman on the Employment Act of 1946
The history of the last several decades has been one of speculative booms alternating with deep depression. . . . Democratic government has the responsibility to use all its resources to create and maintain conditions under which free competitive enterprise can operate effectively--conditions under which there is an abundance of employment opportunity for those who are willing to work. . . . It is not the government's duty to supplant the efforts of private enterprise to find markets, or of individuals to find jobs. The people do expect the Government, however, to create and maintain conditions in which the individual businessman and the individual job seeker have a chance to succeed by their own efforts.
back to topThe newly resurgent Republicans won control of Congress in 1946. Their hopes for return to power were frustrated by Truman's upset victory and the loss of control of Congress in 1948. But with the war hero Dwight Eisenhower leading the ticket, they won control of both Congress and the presidency in 1952. However, the Democrats regained control of Congress in 1954 and fattened their majorities in 1958.
The return of Republican control of the national government in the Eisenhower landslide of 1952 did not bring return of the laissez-faire philosophy to the scene. Eisenhower's victory in the Republican nomination struggle over Senator Robert Taft represented the continuing dominance of the liberal eastern wing of the party that had accommodated itself to activist government, if not to all of its programs. The Republicans, chastened after 20 years out of power, did not make a frontal attack on the activist state. Instead, they tried to distinguish their philosophy from that of the Democrats by prescribing a more limited role for the activist state.
Eisenhower's public philosophy is perhaps most clearly expressed in his State of the Union addresses. For example, in his first State of the Union message Eisenhower sounds much like FDR or Truman regarding the premise that the activist state should insure the income of individuals under certain conditions. In his second State of the Union message, Eisenhower provides some rules of thumb for when government action should be considered legitimate and when it should not.
The pattern of the limited interest state can be seen by examining government budgets from the presidencies of Hoover through Eisenhower. When Herbert Hoover took office in 1929, national government expenditures were a small fraction of total economic output. Under FDR and Truman, government expenditures rose dramatically, first for the New Deal, then much more explosively for World War II and the Korean war. Government expenditures climbed to over 40 percent of GNP during the second world war, shrank to 13 percent after the war, and then climbed to over 20 percent during the Korean war.In a modern industrial society, banishment of destitution and cushioning the shock of personal disaster on the individual are proper concerns of all levels of government, including the Federal Government.
The aspiration of most of our people can best be fulfilled through their own enterprise and initiative, without Government interference. The administration, therefore, follows two simple rules: First, the Federal Government should perform an essential task . . . only when it cannot otherwise be adequately performed; and second, in performing that task, our Government must not impair the self-respect, the freedom, and incentive of individuals.
back to topUnder Eisenhower government expenditures stabilized, ranging from 15-20 percent of GNP. Big government was here to stay, but the growth of government was limited during the Truman and Eisenhower administrations. Most of the domestic programs that had survived the FDR period were retained, although a few were eliminated and many were pared back. The world war and the cold war made military production the central element of the limited interest state, consuming more than half of all government expenditures during the 1940s and 1950s.
LYNDON JOHNSON AND THE GREAT SOCIETY back to top
John Kennedy and Domestic Deadlock
In the 1960 campaign John Kennedy promised to get the country moving again, to bring a new generation of leadership and a new dynamism to American politics after the surface tranquillity and the lack of innovation in domestic policy in the Eisenhower years. He succeeded in this, perhaps more than he ever wished. The 1960s were a period of rapid political change, particularly in the immediate aftermath of Kennedy's assassination.
On the one hand, Kennedy's election was the result of the mobilization of new political forces like the emerging civil rights movement and a renewed political vigor of the more traditional elements of the old New Deal coalition like organized labor. On the other hand, his victory, coupled with his rhetorical and stylistic calls for change, served as a spur to further mobilization of these groups, particularly the civil rights movement.
President Kennedy gave symbolic support to the rising civil rights movement
but was unable to pass civil rights legislation through CongressThe Kennedy campaign reactivated the old New Deal coalition, which despite its political survival, had been dormant as a force for policy innovation since early in the second FDR term. Kennedy's call for a New Frontier echoed FDR's call for a New Deal. Programmatically, Kennedy backed federal aid to education and a new government medical insurance program to guarantee the elderly could get health care. Later, as the civil rights mobilizations intensified, a broad-based civil rights bill and the war on poverty were added to the agenda. However, the conservative coalition still dominated Congress and was able to block these programs throughout the Kennedy years.
In November 1963 the nation was shocked as Kennedy was struck down by an assassin's bullet. It seemed especially tragic that such a young and dynamic leader could be erased from the national scene, cut down before the great promise of his presidency could be realized.
The Civil Rights Act of 1964 and the Defeat of White Supremacy
Kennedy's martyrdom contributed to the realization of his program. So did the political skills of his successor, Lyndon Johnson, who had mastered the art of legislation in his years as Senate majority leader prior to being selected as vicepresident. Johnson moved quickly to use his grace period of succession to enact key elements of the Kennedy program.
Johnson the Southerner was in a particularly good position to sell the civil rights act to the country. As a senator from segregated Texas, he had opposed prior civil rights bills more on grounds of electoral prudence than on principle. But as president, Johnson had a national constituency. Because of his southern roots, he recognized both the seriousness of the crisis and the key role it would play in perceptions of him as a national, rather than a regional, leader. He applied the full force of his office and his considerable legislative skills to the task of passing civil rights legislation.
Young boy at "colored" water fountainSince the slaves had been freed after the Civil War, southern whites had used their state governments to develop an elaborate system of white supremacy that relegated blacks to second-class citizenship. A series of measures like all-white primaries, the poll tax, and discriminatory voter registration practices had denied blacks in the South the elementary right to vote. Blacks were segregated from whites in both public and private facilities. Blacks attended separate schools, rode in separate sections of buses, stayed in separate hotels, and even ate at separate lunch counters. Blacks generally held the lowest-paying jobs and were excluded from positions of power in white-owned businesses.
The system of segregation was justified by the ideology of white supremacy. Many whites believed blacks were inferior to whites in intellectual capacity and moral development. It was widely believed among whites that it was right and natural that blacks should be subordinated to whites in the political and economic system. The doctrine of states' rights asserted that any national intervention to alter segregation would be an unconstitutional interference in the affairs of the states, a new tyranny of the national government.
The civil rights movement demonstrated to the rest of the country how brutal white supremacy actually was. As the TV news entered most American homes in the 1950s, it increasingly showed southern blacks petitioning for such elementary rights as voting and entrance to state schools being met with police dogs, billy clubs, fire hoses, and even bullets in the night. The Kennedy administration, which had tried to walk a fine line between racial justice and holding the support of racist southern Democrats, finally was forced to ask Congress to pass civil rights legislation. But it fell to the Southerner Johnson to shepherd the bill through Congress.
Powerful fire hoses are used on peaceful civil rights
demonstrators in Birmingham, Alabama, 1963The Civil Rights Act of 1964 ended the system of white supremacy and official segregation in the South. It banned discrimination in public accommodations. Businesses would have to treat white and black customers alike. Discrimination by employers in the hiring and promotion of their workers was banned, and strong legal sanctions were put in place against states and businesses that continued discriminatory practices. The Justice Department was empowered to sue states or businesses that did not comply, and the penalties for continuing discriminatory practices were substantial. States could lose federal subsidies for programs that discriminated. Businesses could lose federal contracts.
President Johnson signing the historic Civil Rights Act of 1964 The Civil Rights Act was followed by the Voting Rights Act of 1965. White supremacists had excluded blacks from participation in the southern political system down to the level of denying the right to vote. The Voting Rights Act provided national guarantees for blacks' and other minorities' ability to participate in the political process.
The philosophical shifts in racial policy in the mid-1960s can be characterized by comparing the dominant ideologies on racial issues prior to the passage of the Civil Rights Act and the 1964 election with the prevailing public philosophy on racial issues in their aftermath. Prior to the 1960s, white supremacy was the dominant ideology in the South. Open support for white supremacy was not common outside the South, but most nonsouthern whites felt a stronger cultural sympathy with white Southerners than with blacks. In the first half of the twentieth century, open advocacy of civil rights was heard only from the most liberal leaders. FDR, Truman, and Eisenhower had taken only halting steps in the direction of enforcing civil rights.
In the 1950s and early 1960s the civil rights movement laid bare the ugly truths of racial hatred and challenged the conscience of the nation. The racial polarization in the South forced the country to make some clear choices between civil rights and segregation, and the philosophy of white supremacy was completely routed. The Civil Rights Act of 1964 and the Voting Rights Act of 1965 decisively defeated the doctrine of white supremacy. Even when racial tensions rose again during the urban riots of the summers of 1966-1968, open advocacy of white supremacy was relegated to a place beyond legitimate ideological debate.
The Expansion of Government During the Great Society
Along with the passage of civil rights legislation, Johnson called for a war on poverty. In part the war on poverty was designed to meet the economic demands of the civil rights movement, which argued that it did little good to be able to sit at the same lunch counter with whites if one did not have the price of a meal. But the war on poverty also was an attempt to cast the newly activist federal government in a role that white working people could identify with, that of provider of public goods and services. It is in talking about the war on poverty in his first State of the Union message that Johnson's philosophy of government is most clearly revealed.
The war on poverty legislation passed in 1964 fell far short of LBJ's rhetorical flourishes. Other elements of the presidential program were completely stalled in Congress. The 1964 election was a key turning point. In large part in reaction to civil rights legislation, a new social mobilization was appearing on the right that led to the nomination of Barry Goldwater by the Republican party. Goldwater led the most aggressive ideological campaign against government activism since the 1930s.Lyndon Johnson on the War on Poverty
Unfortunately many Americans live on the outskirts of hope—some because of their poverty, and some because of their color, and all too many because of both. . . . This administration today here and now declares unconditional war on poverty in America . . . we shall not rest until that war is won.
Our chief weapons . . . will be better schools, and better health, and better homes, and better training, and better job opportunities to help more Americans. . . . Our aim is not only to relieve the symptoms of poverty but to cure it; and above all, to prevent it.
—We must enact youth employment legislation to put jobless, aimless, hopeless youngsters to work on useful projects.
—We must distribute more food to the needy.
—We must, by including special school aid funds as part of our education
program, improve the quality of teaching and training and counseling in our hardest hit areas.
—We must build more libraries in every area, and more hospitals and nursing homes . . . and train more nurses to staff them.
—We must provide hospital insurance for our older citizens.
—We must . . . provide more housing for our poor and our elderly, and seek . . . a decent home for every American family. back to top
In his 1960 book, Conscience of a Conservative Goldwater laid out his philosophy of "limiting the functions of government"
Throughout history, government has proved to be the chief instrument for thwarting man's liberty. Government represents power in the hands of some men to control and regulate the lives of other men. And power, as Lord Acton said, corrupts men.
The federal government has moved into every field in which it thinks its services are needed. . . . The result is a Leviathan, a vast national authority out of touch with the people, and out of their control.
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While Goldwater's campaign prefigured the successful Republican strategies applied by Nixon and Reagan, in 1964 it led to a decisive Democratic victory. Not only did Johnson win in a landslide, but the already strong congressional Democrats picked up 37 House seats. The two to one majorities in both houses of Congress were the largest the Democrats enjoyed since the 1930s. For the first time since the 1930s the liberal Democrats had the votes to overpower the conservative coalition in Congress.The result was the most activist legislative session since FDR's first term. The first broad-based federal aid to education was voted, targeted to school districts with large poverty and minority populations. The Medicare and Medicaid programs were created, providing government health insurance programs for the elderly and the poor. The Voting Rights Act provided national guarantees of minorities' ability to participate in the political system. The war on poverty and its community action programs were dramatically expanded. Federal job training programs were expanded and targeted toward the chronically unemployed. Access to welfare was expanded. Federal aid to the inner cities was increased. Community action programs tried to mobilize the poor to fight for their rights.
The Fragmenting of the Democratic Coalition
The year 1965 was the high point of the Great Society. 1965 also brought the major commitment of U.S. ground forces in Vietnam. As in the later FDR administration, guns began to replace butter as the national priority. The Republicans gained 47 House seats in the 1966 congressional elections. The innovative period of the Great Society was over, although government spending for programs voted in the early Johnson years continued to rise into the 1970s.
In 1965 Johnson believed that he had to move quickly to utilize the historic opportunity presented by the convergence of the national desire for change in race relations and social policy and his landslide victory, because such a chance would not likely come again soon. History proved him right in that assessment.
As the Vietnam War escalated, unrest on the college campuses did likewise. At the same time the war on poverty bogged down and race rioting swept the urban ghettos. The coalitions LBJ had carefully crafted began to fragment. By 1968 he was facing a serious challenge within his own party from both the left and the right. Minnesota Senator Eugene McCarthy and then from Robert Kennedy, the martyred president's brother, challenged for the Democratic nomination as anti-Vietnam War candidates. On the right, segregationist Democratic Governor George Wallace first ran as an independent. Rather than face a sustained battle for renomination, LBJ withdrew. After the assassination of Robert Kennedy, Vicepresident Hubert Humphrey eventually became the Democratic standard-bearer. But the party had been irreparably damaged by the primary battles and open conflict at the Chicago convention, and Republican Richard Nixon won the 1968 election.
Conflict between various Democratic candidates deeply split the party and cost it control of the presidencyBut the fault lines in the Democratic coalition were deeper than the feuds among the top leaders. The moderates of the 1950s who had counseled that confronting the civil rights issue would irrevocably split the historic Democratic coalition ultimately were proved correct. Richard Nixon, expressing popular frustrations with the quagmire in Vietnam and the growing racial and political polarization, swept into office in the election of 1968.
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Web sites marked with * provided images for this chapter. Many images also are linked to the web site from which they originated.White House links to all former presidents' official libraries a good linking point if you want to study the official documents of several different presidents
The National Archives links to all former presidents' official libraries Another route to the presidential libraries
*NAIL Digital Images Search Search the National Archives and Records Administration for online presidential documents
*The Lyndon Johnson Presidential Library
The John Kennedy Presidential Library
John Kennedy: A New Generation click on speeches icon to get several key Kennedy speeches
The Dwight Eisenhower Presidential Library
*The Harry Truman Presidential Library
*The Franklin Roosevelt Presidential Library
*FDR Cartoons Political cartoons about FDR and the New Deal
The New Deal Network Unofficial site commemorating Franklin Roosevelt's New Deal programs
Franklin Roosevelt and the New Deal 52 links to sites on FDR and the New Deal
*C-SPAN State of the Union files watch State of the Union messages of presidents back to 1989. Transcripts of State of the Union messages available back to 1945
History and Politics Out Loud audio files of presidents in office, with transcripts also available. Many files available for Richard Nixon, Lyndon Johnson, and John Kennedy
Inaugural Addresses The Inaugural Address is a key speech made when presidents are sworn into office. This site has them all
Speeches of the Presidents Inaugural Addresses, State of the Union Messages, and selected nomination acceptance speeches and war messages
The American Presidency: A Glorious Burden Highly recommended. Prepared by The Center for the Study of the Presidency, a leading group of scholars who study the presidency
Presidents of the United States Links to info on all American presidents. For each president it gives a brief biography, election results, cabinet members, chronology of major events, links to other internet biographies, links to key historical documents of the era, and other related links
The American President Biographies of each president and several essays on the presidency. Links to historical documents and other web resources. Each biography includes many links, including definitions of key terms
The American Presidency links to encyclopedia articles on each president and related subjects
Biographies of the American Presidents Biographies of each president. If the music file irritates you as much as it does me, click on the upper left to stop it
The Yale Law School Avalon Project Large collection of official papers on several presidential administrations. You can also find many international and congressional documents at their Major Collections page
Presidents' Day Links to resources on several key presidencies
Leadership Links on several presidents and articles on the presidency
The Political Resources Page Provides links for each president
University of Colorado Presidents Online Page links and explanations of many presidency web sites but too many dead links
