Vote for Me and $7,000

September 26, 1960

All through the twenty years of the Roosevelt and Truman Administrations, from 1933 to 1952, Democratic orators both implied and stated that to vote for a Republican President would be to vote for a return to depression, mass unemployment, bank runs, mortgage foreclosures, apple selling, and bread lines. A Republican President was eventually elected, and none of these things happened. On the contrary, our present economic fetish, the gross national product, is now at the highest level on record.

This would be embarrassing for Democratic orators today had not a new slogan, Economic Growth, come to their rescue. Sure, the economy grows; sure, everybody’s income gets higher every year, automatically; you can hardly prevent it. But our economic “rate of growth” just isn’t what it ought to be. The Republicans are holding it down, because they lack vision and are cold-blooded. Elect us to office, and watch things hum!

Anybody who thinks this is a caricature need merely read the full text of Senator Kennedy’s Labor Day speech in Detroit. He was very specific: “With an average rate of growth in this country every workingman in the last eight years would have received $7,000 more than he has received for an education, or a new house, or a rainy day, or his old age. With a really healthy rate of growth this country can have full employment for all who want a job.” How to get this $7,000 and this rate of growth? Simple: “Elect an administration that will do something about it.”

HOW TO RETARD GROWTH

The senator didn’t bother to explain just what this “something” would be. The only specific hint he threw out is that he would halt “this high-interest-rate policy.” But American interest rates today are among the lowest in the world. And the chief effect of the cheap-money policy under the New and Fair Deals was to produce or aggravate an inflation that cut the purchasing power of the dollar in half.

Kennedy never mentioned any policy that really might increase our rate of growth such as less drastic graduated income taxes to give more incentive to production, or sensible tax allowances for depreciation to encourage more new capital investment by corporations. Perhaps the crowning irony of the whole “rate of growth” agitation is that the people who insist most on faster growth demand policies least likely to promote it.

Kennedy’s Labor Day speech was no more convincing in its “facts” than in its theories. Take “Fact No. 1”: “Our economy, under the first six years of the Republican Administration, grew one-half as much as under the last six years of the Truman Administration.”

THAT TRICKY GNP

Why the last six years of the Truman Administration? Why not the first six? In 1944, the year before Mr. Truman came into office in April 1945, the official figure of the gross national product (as measured in “constant” 1959 dollars to eliminate the effects of more price inflation) was $366 billion. In 1945 it fell to $360 billion. In 1946 and 1947 it was down to $316 billion each year. In 1950 it was still only $356 billion.

In other words, in the first six years of the Truman Administration, the GNP actually fell in real terms. In 1952, the year before Mr. Eisenhower took office, the GNP was $399 billion. This rose to $451 billion in 1958, to $482 billion in 1959, and is currently running close to $500 billion.

The trick of Kennedy’s “rate of growth” comparison is that it was measured from the low point to which GNP fell in 1947. The rise to 1952, incidentally, was caused in large part by Korean-war expenditures. In fairness to Mr. Truman, the decline in GNP after 1945 was also largely the result of the decline from Federal World War II expenditures. Consumers were not less well off in 1947 than in 1944; the contrary was true. But all this only shows how artificial and tricky these GNP “rate of growth” comparisons can be.

The broader question raised by Senator Kennedy’s Labor Day speech, and its crude lure of “$7,000 for every working man,” is whether he himself understands the facts as little as his remarks indicate, or whether he merely has a low opinion of the voter’s intelligence.