“When you compare the two progressive impulses of our past, the 1930s New Deal, 1960s Great Society, which costs us more? … People think New Deal was so socialist, but Great Society costs us more,” says Amity Shlaes, author of the new book, “Great Society: A New History.”
“Why does it matter? Because even a little bit of socialism takes us toward a lot of socialism,” she adds. On today’s Daily Signal podcast, Shlaes breaks down why the 1960s were so radical, and the long-term results of that decade’s radical policies.
We also cover these stories:
- The Justice Department adds a new subdepartment to detect those who became citizens despite a background that should have disqualified them.
- New York’s 2nd U.S. Circuit Court of Appeals gives President Donald Trump an immigration victory in a blow to sanctuary cities, ruling Wednesday that money can be denied to states that fail to work with federal immigration officials.
- Senate Minority Leader Chuck Schumer, D-N.Y., asks lawmakers to allocate $8.5 billion of emergency funds to fight the coronavirus.
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Kate Trinko: Joining us on the podcast today is Amity Shlaes, the author of the new book “Great Society: A New History.”
Amity is also the author of “The Forgotten Man: A New History of the Great Depression” and “Coolidge.” She is a scholar at The King’s College and chairs the board of the Calvin Coolidge Presidential Foundation and the Manhattan Institute’s Hayek Book Prize.
Amity, thanks for joining us.
Amity Shlaes: Glad to be here.
Trinko: Let’s start at a 101 level. What is the Great Society and why were you interested in writing about it?
Shlaes: Imagine a period when everyone’s feeling really idealistic and they want to change the world, improve the world. Not just be good, be great. Sounds like now, but actually it was the early ’60s.
The only question in the early ’60s with all this idealism was, should the federal government be the vehicle for getting to great or should the private sector? We chose the federal government, the public sector, and said, “We’re going to have a great society. We’re going to change things through legislation.”
Trinko: We all, of course, know that the ’60s was an era of change.
You write in your book, “Underlying the new American ambition was dissatisfaction with the pace of projects that had been launched in the 1950s. Civil rights law that had not desegregated train stations or schools, the construction of interstate highways that didn’t seem to help the poor, urban renewal funding that could not meet the needs of all.”
What do you think was going on in the ’50s that made society so ripe for change in the ’60s?
Shlaes: The ’50s was the period of the military-industrial complex. When we assume that government and companies work together, maybe with a third party at the table, that would be labor unions, so a bunch of smart people get together and plan the rate of growth. It was almost Soviet, this assumption of how economies work.
One of the large projects was urban renewal where essentially you bulldoze the center of cities in the name of building new housing—also sounds familiar—imperative of housing, and that was not particularly successful.
We built giant new projects that people didn’t like almost from the get-go—living stacked, bunk bed-style, instead of in their old homes, as dilapidated as those homes had been.
That mindset of government and people working together, government spending to improve life, commenced in the New Deal, even picked up in the supposedly capitalist ’50s.
In the ’60s, that components of the Great Society were city, countryside, classrooms. You want to imagine three areas of operation declared by President Lyndon Johnson when he officially said we’re going to have a Great Society. This is our motto and these are the areas: cities, countryside, classroom.
Trinko: And was there any precedent in American history for dividing up the population in that way, looking at it that way?
Shlaes: Not quite. In the New Deal, Franklin Roosevelt divided up the country. He actually divided it into river basins. You think of the Tennessee Valley Authority is over the region of Tennessee or the other dams that were built, and that was a kind of weird way to divide a national economy. Politicians divide our lives up in strange ways.
What was interesting about that [is]—and this is an audience aware of federalism—the reason for the authorities regionally was they were over the states, but they weren’t the federal government. They were sort of in between TVA and so on. So who’s in charge of them? The courts have to clarify that. And while they think, while we wait for jurisprudential clarification, guess what? We are in charge, we, the TVA, or so on.
When you create a new entity, you buy yourself some time before it’s all clear in the courts whether you actually have the authority to operate.
And in the New Deal, many new institutions and authorities and commissions—that’s what progressives do—took over, and it wasn’t clear whether they were constitutional. But while we waited for that to come out, of course, they operated and changed the economy in American’s lives.
Trinko: That’s fascinating. You talk about in the “Great Society” about this bureaucrat who was involved in President Lyndon Johnson’s administration’s poverty initiatives. And this man, Michael Harrington, had socialist sympathies.
You write that he and a friend of his would end memos with this line, which I was just really surprised to see, “Of course, there is no real solution to the problem of poverty until we abolish the capitalist system.”
Do you think there were socialist motives in some of the Great Society programs? Were there other bureaucrats who had a similar mindset? What was kind of the role of socialism ideals in this?
Shlaes: Michael Harrington was actually a wonderful man. He was kind of impish, that was humor, and he was a true socialism advocate, a socialist, as he would say.
He didn’t last long in government, so he wasn’t a successful bureaucrat. He was a firebrand they brought in for fun.
But then you want to think about all the bureaucrats, that is the professional government employees and what they thought. They thought, “Well, this is still capitalism. We’ll take the money from the capitalists and spend it. The government will spend it on a new program that makes America stable so we don’t go communist.”
That was the mental thought process in the period of the Cold War of say, your standard, I don’t know, department head in the federal government.
There you are. Michael was just brought in for fun, but some of his ideas did inform the Economic Opportunity Act, which was the poverty law of the Great Society.
The act created an office, which was led by Sargent Shriver, the brother-in-law of the late president that would be JFK and the man who too wasn’t communist, wasn’t even socialist. But he did believe that all the things the church does could be done better if the federal government multiplied the amount of money and did charitable work.
One of the, I think, fallacies of the Great Society, and that’s what I tried to show in my book, is what the church does the government cannot do. To assume that what the church does, the government can do, that’s the fallacy.
That government cannot replicate the church. It’s different. The church is very local, usually, no matter how centralized it is, and it does what people need on the ground. They need—”Oh, I, the priest; I, the minister; I, the rabbi, see that shoes are necessary. Let there be shoes.”
That’s very different from the federal government looking down and saying, “Here’s what all American towns need. We’ll send them money.” And that’s what the War on Poverty was.
Trinko: Let’s talk a little bit more about the War on Poverty. You note that at the end of the War on Poverty—which we’re not really there, but it’s been going on for four or five decades now—it didn’t eliminate poverty, but it created a new kind of poverty, a permanent sense of downtroddeness. How did this change the U.S.?
Shlaes: … If you go back and look at the Great Society, and this is Lyndon Johnson’s baby—although, in the “Great Society” book I talk about John Kennedy and Richard Nixon as well—Johnson didn’t say, “We will make poverty better and more bearable, and the people who are poor will have food so they won’t starve.” That’s not what he said. He said, “We will cure poverty.” A different idea. Well, that failed.
Poverty was already curing away before the Great Society because of economic growth. The share of people who fell into the category called poverty was dropping.
We had maybe even up to 30% of people who were under the poverty line as established by the government went down to 25%, 20%, 15%, but poverty was never cured. The poverty share reduction slowed after the Great Society and we kind of got stuck at 10%.
People are sometimes poor. It happens. The question is whether they have hope, whether they move with alacrity out of poverty or whether they’re always the same people.
The problem now is that as a result of the creation of all these entitlements, we have people who are not only on food stamps, they may need them, we support that, but what we don’t support is they expect to always to be on food stamps and they expect their children to be on food stamps. And those children will insult anyone who dares to argue that a future of food stamps might not be good.
This idea that it is always yours and forever because you are owed is bad for the donor, bad for the fisc, but terrible, most terrible for the recipients.
Trinko: One of the chapters in your book is about [General Electric Co.], and I didn’t know anything about this. GE was apparently for a decade or so promoting capitalism and free markets to its workers. Can you talk about that? I just find it so hard to imagine a major company doing something like this.
Shlaes: But GE is a cool company. It’s at the heart of American entrepreneurial culture, not only because of Thomas Edison. A guy has an idea in a lab, he has a lot of ideas. Most fail, one works, that’s GE. But also through the interesting governance and leaders like Charles Coffin, who co-founded GE with Edison and made it work financially and made it a national company. …
But it’s also a big government servant. The government is its client. It funds the turbines that go to the Tennessee Valley Authority, TVA, right? That’s an example of an institution that’s kind of New Deal strange. It provides equipment to the space program. That’s very important, NASA. GE is both critical of government and dependent upon it. It’s part of the military-industrial complex.
This one executive there—and let’s remember his name because he was special, Lemuel Boulware; I’ll say it again, Lemuel Boulware—had this idea that the military-industrial complex that Ike described, President [Dwight] Eisenhower described, that GE was wrong and eventually too much government involvement would kill capitalism.
The other executives at GE thought he was a fool. They were glad he was over 60 because they were looking forward to his retirement. They didn’t want some right-wing propagandist walking around. They were cool people like the Mad Men on the television show. They were all about marketing. And here was this guy saying, “Capitalism good, communism bad.” It was way too primitive for them.
Nonetheless, he was permitted to persist. He had a TV show, “GE Theater.” He mimeographed little documents. “We’ll lose everything we cherish unless we fight for free markets.”
And, actually, what happened to Lem Boulware, he hired an actor to spread his propaganda, to learn speeches about markets, to rail against the TVA even because it was part of the government.
They had bad fortune. It turned out, GE, this pristine model of capitalism, this company that was compared to, I don’t know, as American as baseball, was cheating. Its executives were colluding with executives from other electric product companies, let’s just say, to charge prices that were too high to the Tennessee Valley Authority.
Now, you can’t go around being all sanctimonious about the Tennessee Valley Authority and then cheat it at the same time. That kind of wrecked the whole free market propaganda campaign because GE was clearly just a big cheater, right? They were just making money off the American taxpayer by overpricing to the TVA. No question about it, this actually happened.
GE executives were prosecuted by the attorney general, who in the end turned out to be Robert Kennedy. They went to jail. The unions mocked them. One of the union leaders sent a GE executive, while he was in jail, the board game Monopoly to tease him for his awful behavior. And the actor was fired and Lemuel Boulware went into retirement to Delray Beach and, presumably, his La-Z-Boy, and everyone was sad.
Then came the Great Society of the ’60s, everyone on the free market side that is, and did all the things that Boulware had warned against. One measure after the other.
Bigger involvement in schools, higher taxes, less freedom for business, dealing with poverty through the government instead of providing opportunity to workers. So Boulware was pretty sad.
But as it happened, that actor was a little bit convinced. He had started as a rock-rib Democrat, but after a while he was convinced by his own speeches and by his own reading. Boulware had him on a terrific reading course of Hayek, Hazlitt and, I don’t know, Bastiat. And he read and read all about free markets and he told his son he believed in it and he bought some GE stock.
And when the 1964 election came, he was out of a job from GE. That was over, but he gave a speech for Barry Goldwater called “Time for Choosing.” Of course, this actor was Ronald Reagan. This speech was straight out of the GE textbook of Lemuel Boulware. Reagan really believed it. Goldwater lost, but Reagan didn’t give up on the ideas.
The investment that Boulware made, Reagan, of course, became governor of California, then ran for president much later. In 1980, [he] became president.
Imagine a 20-year lag on an investment, which is what this was for GE, but it paid off exponentially. And here we are talking about Lem Boulware, so he wasn’t forgotten. Lemuel Boulware of GE, great name for a baby or a puppy.
Trinko: Yeah. He’s a fascinating character in the book. When we talk about the ’60s, we often talk about the Vietnam War. How did it play a role in the domestic policies or was it not really relevant to them?
Shlaes: Oh, of course, it was relevant. You want to imagine a theater stage, right? And my actors in my book were Sarge Shriver, the “poverty czar,” or Lyndon Johnson or Walter Reuther, the great United Automobile Workers leader.
They’re walking on the stage and acting, and in the background you hear “rumble, rumble, rumble, rumble.” That’s the war, right? And the rumble gets louder and louder until you can’t hear the characters. That’s the way the war felt because the number of soldiers in Southeast Asia went from in the 50,000 range to in the 500,000-man range very quickly. And wow, that’s a big change for this society.
It certainly disquieted President Johnson. He’s “losing boys,” as he put it. The conflict wasn’t going well for the United States.
But another way to look at the war in Vietnam is we believed in ourselves. We believed we were the “best and the brightest.” That’s the phrase that was used to describe the policymakers and generals who led the war in Vietnam and they didn’t really look at what was happening on the ground.
We’ve discovered that now they bombed the wrong way. They didn’t understand the perseverance of the Viet Cong, the communist side, guerrilla soldiers. It was a guerrilla war, not a bombing war. It wasn’t like Germany. They were fighting the wrong war.
And the one reason it took so long to recognize our failings in Vietnam was the arrogance of the intelligence of the leaders, of Secretary [Robert] McNamara of defense who thought he had to be right because he was so smart.
Well, there was a corollary on the domestic side. The leaders of the Great Society and the domestic side said, “I’ve got to be right. I went to the right school. I’m a genius. Everyone knows it. I’m good looking. I might know the Kennedys. I am cool.”
It’s just as simple as that. When you’re that arrogant, you can do a lot of damage before you realize you’re a fool or that a particular strategy is wrong.
In the case of the War on Poverty, what we were doing was giving political money, essentially, to left-leaning local groups who then would asale, say, the mayor of a town.
[An] example would be Sam Yorty of LA. He was kind of a bantamweight Democrat, sort of like a rooster. Sorry, Yorty family, but that’s how he seemed to be. A really good fighter, Democrat but conservative, didn’t like the Kennedys, and he had his own poverty plan for LA.
LA wasn’t doing so poorly. The police department was too bigoted. It needed to be fixed. Many of the people weren’t quite trained enough for the new tech jobs, same as today, and we had a terrible legacy of discrimination and abuse by the police in areas such as Watts.
But Yorty had an honest hope that he could fix all that, particularly if he received federal money he was promised by Lyndon Johnson. And certainly, it looked like he would get that money once the War on Poverty was funded to the tune of a billion [dollars].
What happened was not that. What happened was the War on Poverty and the poverty czar, Sarge Shriver, said, “We don’t like any of these Yorty operations or these Richard J. Daley operations in Chicago. We want our own kind of poverty office. We want to kind of look over and pick which poverty office we use.”
And the poverty czar and his staff looked past the extant projects and the mayors and basically created their own vessels to receive the federal government money.
Generally, vessels are institutions that were far to the left of what the voters had selected. Those were groups that basically wanted to do activism. [They] would take the money and go sit in the mayor’s office, protest loudly, pick their own agenda, maybe focus on housing instead of jobs.
The mayors were just appalled. They had supported Lyndon Johnson in 1964, Mayor Daley had elected Lyndon Johnson, from his point of view, of Chicago in 1964.
And Daley calls up the White House and he said, “Does the president realize he’s sending M-O-N-E-Y to subversives? Does the president realized that?” Because Daley was conservative, Johnson was conservative. That is they operated within the Democratic Party machine, national or local.
“Wow. These are people who want to unseat me. Who elected him? Has he thought that through?”
And, actually, Johnson hadn’t. … It was said he made laws like “other men eat chocolate chip cookies.” He said, “I want to have a poverty law. LBJ. I like that idea. FDR, my inspiring father, would have liked that idea.”
… The meaning of the actual legislation, or how it was interpreted, it meant for the American city or our system of federalism that he hadn’t thought through. And in fact, they kind of reined it back once they realized what the War on Poverty was doing.
The high point of the hilarity was a television show about the War on Poverty with The Supremes, and so on, singing in Detroit at a factory about youth empowerment.
It was very ridiculous. And you want to imagine money flowing from, actually, the networks to support the government in the War on Poverty making a ridiculous TV show.
The lawmakers, when they saw people singing all about empowerment and War on Poverty, … it was, “I just want to throw up when I watch this.” They called the White House, “I can’t believe you’re doing this.”
You want to imagine kind of jingoism of the War on Poverty going to the level of the absurd.
Trinko: Wow. I did not know any of that. … I kind of want to see that special now. You also mentioned that the 1960s still affect us, that they’re catching up to us in our current day and age. How do you see that happening?
Shlaes: Well, it’s not what I see. It’s what the data does. … We committed in the Great Society to programs such as Medicare and Medicaid. We committed to large welfare spending, which we actually still are committed to, notwithstanding President [Bill] Clinton and Congress’ efforts. It used to be we could afford those projects, but they’re growing like crazy.
So we are visiting by sticking to the Great Society commitments, enormous taxes upon our children and grandchildren, higher interest rates, a darker future. Because all the Great Society projects, the way they’re structured, they grow with the economy. They’re almost impossible to outgrow; and that’s also true of the New Deal projects.
But when you compare the two progressive impulses of our past, the 1930s New Deal, 1960s Great Society, which costs us more? Great Society costs us more. … People think New Deal was so socialist, but Great Society costs us more.
Why does it matter? Because even a little bit of socialism takes us toward a lot of socialism. You really can tip over if the state quota, as they say, is too much. If the government employs too many of the workforce, if the federal budget is too heavy, the economy has trouble eventually.
Trinko: In the course of writing this book, what facts or figures that you learned about surprised you the most or maybe were the most entertaining?
Shlaes: Well, today we don’t hear about unions. What is right to work? If we start a company, we tend to move it in a right-to-work state because we have less union rules upon us. Fewer union rules dominating the way we structure the firm. There’s evidence for that and there’s a chart at the end of the book.
But what is a private union? We talk a lot about public sector unions and teacher [unions], what is a private union? A smaller share of the American workforce by far belongs to the private sector unions, the UAW, the United Autoworkers, and so on.
What I didn’t realize until I looked at this period was that the United Autoworkers and the other unions were mighty, mighty at the beginning of the ’60s. They were a big part of the economy. They were a big part of the Democratic Party. And a lot of these unions and union leaders were reasonable people. They helped to fight the war on communism.
Walter Reuther, who’s one of the characters in my book, the charismatic leader of the UAW, was not a communist. He was basically a Scandinavian Social Democrat who loved American capitalism.
His error was he thought America could afford social democracy forever. He wasn’t a trader. He was just wrong. Walter Reuther … and all the union leaders in the period expected right to work to be repealed.
That is currently in union law. A state can opt out of heavy unionism by voting itself right to work, and then a firm may not have to have a union or it may choose among unions, and workers may choose as well. That’s important. Whereas [in] union states, it’s pretty clear the big, strong union comes to your company. You have to accept it and negotiate with it.
Naturally, union leaders didn’t like the option of right to work. They want all America to be not right to work, to be union. They don’t want an escape hatch, a natural experiment proving them wrong.
The union leaders, particularly George Meany of the AFL-CIO and also Reuther of the UAW, fought very hard to get [the] right-to-work option repealed, to change the Taft-Hartley Act, which is the original law, so that every state was necessarily unionized.
As it happened, President LBJ supported that and promised it, but he got too tired.
You asked before, “What about the Vietnam War?” One of the things that tired LBJ out was the Vietnam War; and therefore, he never got to repeal this right-to-work provision; and therefore, we did have a natural experiment that proceeded from 50 years ago to now.
And what we saw is right-to-work states go faster. People want to live in them. Just like low-tax states grow faster, people want to live in them. Even if their climate is awful, people want to live there because they’re freer.
That was an extremely valuable experiment and I never realized how valuable the right-to-work experiment was for the United States in that it showed us what we can get when we have a freer economy.
Trinko: Well, thank you so much for being on with us today.
Shlaes: No, thank you.
Trinko: OK. And again, the book is “Great Society: A New History.” I’m reading it now. It’s really well-written and it’s a pretty gripping look at the ’60s, so I highly recommend it.
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