Chapter 481 of 943 · Business Tides: The Newsweek Era of Henry Hazlitt by Henry Hazlitt
GOP Double-Think
September 10, 1956
Last week I remarked in this place that the Democratic platform was intemperate, repetitious, full of half-truths, untruths, and self-contradictions. By comparison, at least, the Republican platform has several merits. It is just as repetitious; it is also full of half-truths and misleading implications; but its tone is much more temperate, its program is less fantastic, and it pays at least lip service to the ideal of limited Federal intervention and limited governmental power:
“We hold that the major world issue today is whether government shall be the servant or the master of men. . . . We hold that the strict division of powers and the primary responsibility of state and local governments must be maintained, and that the centralization of powers in the national government leads to expansion of the mastery of our lives. . . . We are unalterably opposed to unwarranted growth of centralized Federal power.”
But when the platform gets down to details, these words are as if they had never been written. The main record of the Eisenhower Administration, and even most of the present Republican boasts and promises, run directly counter to them.
SELF-CONTRADICTIONS
“We pledge . . . further reductions in government spending. . . .” This is followed by promises of continued or increased spending in uncountable directions. The foreign giveaway program is to be continued. “Small business” is to get loans too unsound for private lenders or investors to make with their own money. More Federal funds are to be spent on more local schools, more subsidized local housing, expanded social security, health reinsurance, flood insurance, more aid to veterans, a grandiose public-roads system. Farmers, in addition to their previous price supports, are to get “soil bank” subsidies, crop insurance, drought and flood insurance, “supplemental credit.” Whenever “producers of perishable farm products” produce “temporary market surpluses,” the government is to buy up the surplus with the taxpayers’ money and give it away. This promise, for some strange reason, is not extended to dealers stuck with a surplus of last year’s automobiles or television sets or perishable novels. For further farm relief, the Republicans promise to “expand” the school-milk and school-lunch program. All of this is obviously inconsistent with protestations of unalterable opposition to “unwarranted growth of centralized Federal power.”
It is obviously also incompatible with the announced fiscal aims of the Eisenhower Administration. You cannot reduce government spending while you increase it. You cannot at the same time have more spending, “further reductions in taxes,” and “continued balancing of the budget.” The Republican platform even pledges, in the face of this program, “gradual reduction of the national debt.” Under President Eisenhower, in fact, the national debt has risen by $7.7 billion—not to mention what has happened to the government’s contingent liabilities.
CONTINUED INFLATION
Nor is the fiscal record or program consistent with the platform’s announced aim “to maintain the purchasing power of a sound dollar.” The Eisenhower Administration, until recently, has been favored with good luck in this respect. But wholesale prices are now 3 percent higher than a year ago, while the consumer price index has hit its highest level on record. Behind this lies a steady expansion in the supply of money. The nation’s bank deposits and currency increased an average of $6.9 billion a year in the last four Truman years—and an average of $6.9 billion a year in the first three Eisenhower years!
Mr. Eisenhower has come sincerely to believe that the maintenance of “full employment” is primarily a Federal responsibility, that the way to achieve this goal has been discovered, and that it consists mainly in imitating and expanding most of the inflationary welfare-state policies of the New and Fair Deals. But this presents a grave dilemma to those voters who are convinced that the real future of America lies in the preservation of individual initiative, self-reliance, and freedom, and who watch with growing concern what Mr. Eisenhower himself has called “the growth of a swollen, bureaucratic, monster government in Washington.”
Business Tides: The Newsweek Era of Henry Hazlitt
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