Mises Wire

Quit Trying to Turn JFK into a Tax-Cutting Budget Hawk

A common talking point among Conservative, Inc. pundits is that JFK would be considered a “conservative” in today’s political climate. Many cite Kennedy’s positions on issues such as gun rights , national defense , and tax cuts as proof he would not fit in today’s Democratic party.

Although these points are interesting, they don’t mean much in the greater scheme of things. Outside of free speech, where the Left has shown its statist tendencies lately, mainstream conservatives have played a significant role in maintaining the Welfare State and the Military Industrial Complex —two hallmarks of the Progressive Era ideological dominating U.S. politics over the last century.

In fact, JFK’s track record as President reveals he was no paragon of free market advocacy.

Misunderstanding the JFK Tax Cuts

Numerous conservative pundits praise Kennedy’s tax cuts as conservative policy and a precursor to Reaganite supply-side policies. However, supply-siders don’t have a monopoly on tax cutting. Robert Schlesinger provides some context surrounding the Kennedy tax cuts:

“The top marginal tax rate was 91 percent, which JFK wanted reduced to a “more sensible” 65 percent. Compare that with today’s 35 percent top rate, and ask: If supply-siders are so enamored of JFK’s tax policies, would they advocate a return to a “more sensible” 65 percent top rate? Applying Kennedy’s tax talk to the current structure, JFK biographer Robert Dallek says, is like comparing “apples and watermelons.”

Schlesinger also adds how Keynesians will justify tax cuts as a way to boost the economy on certain occasions:

“Another important piece of context is the thinking behind the tax cuts. Kennedy’s economic policies were rooted in a Keynesian belief in the stimulative effects of budget deficits. While FDR and his aides had embraced countercyclical deficits as necessary in times of recession or depression, Kennedy was the first to advocate planned deficits in a time of neither war nor economic emergency. The aim was for the tax cuts to stimulate demand, driving the economy from the bottom up.”

In the wake of the Cuban Missile Crisis, Kennedy was concerned about his popularity so he endorsed a tax cut to “stimulate” the economy. He hoped it would help restore his political image. After JFK’s assassination in 1963, his successor Lyndon Johnson would take on the proposed tax cuts. LBJ, however, faced a one major roadblock — Congressional leadership. Martin Friedson explains how LBJ got around this obstacle:

“As Johnson biographer Robert Caro has recounted, LBJ grasped an essential point that Kennedy’s team did not: A major sacrifice of tax revenue could not make it through the Senate Finance Committee unless the administration bowed to Chairman Harry Byrd’s insistence on capping federal spending at $100 billion. LBJ unleashed all his powers of persuasion—and intimidation—on his cabinet members, who delivered sufficient expenditure cuts to lower the budget to $97.9 billion. Satisfied that he had compelled a president to reduce spending, Byrd cast a key vote in committee against amendments that would have undone LBJ’s hard work. That victory for Johnson cleared the way for the bill’s eventual passage in the full Senate.”

To be fair, supply-side economic theory does have its merits, but it also has hard limits in ensuring a stable fiscal foundation. At the end of the day, cutting spending remains key. Supply-side economics and Keynesian theories are two sides of the same coin—two economic approaches advocates of government expansion use to rationalize their big spending programs.

Kennedy’s Interventionist Vision

JFK’s New Frontier program also belies his supposed free market credentials. The New Frontier called for a series of government initiatives to fight poverty—federal aid to education, public works, and expanded social security benefits. Further, JFK was pushing for universal healthcare in 1962, chastising the American government for not following Europe’s path in socializing medicine.

Even with JFK’s death, his legislative efforts would live on during LBJ’s administration. LBJ’s Great Society was the spiritual successor to the New Frontier and a pillar of his unsuccessful War on Poverty program.

But JFK’s economic statism was not confined to social services. JFK made sure to have the State slither into the corporate board room. In Recarving Mount Rushmore, Independent Institute Senior Fellow Ivan Eland exposed JFK’s intrusions into the steel sector:

“To reduce inflation, Kennedy believed that steel was key to the U.S. manufacturing sector and that higher steel prices could adversely affect the entire economy. Therefore, he concentrated on holding down steel price increases, taking the government where it should not have gone — into negotiations between the steel companies and their unions.

The companies let JFK pressure the unions into a no-wage-increase contract, and then they hiked steel prices by 3.5 percent anyway. Kennedy was so furious that he had the FBI and the antitrust division of the Justice Department investigate the steel companies for price fixing and collusion. The companies’ executives had their expense accounts and tax returns scrutinized and their phones tapped. The Department of Defense redirected contracts to smaller steel producers who were playing ball by restraining prices. The larger steel companies got the message and rolled back prices.”

When reviewing JFK’s brief time in office, it’s clear JFK was no free marketer. An ideological creature of his time, JFK maintained the top-down status quo of his New Deal predecessors.

What Difference Does it Make?

Conservative pundits often say present-day Democrats would not fit in with the Democratic Party of the 1960s. But to think statist politics have only been confined to Democrats is wishful thinking. Modern-day Republicans have also embraced socialist policies on numerous occasions.

Yes, there are cultural differences between the two parties on wedge issues like abortion and gay marriage, but these issues should be left to the states—a tell-tale sign of how politicized society has become thanks to excessive centralization.

But in terms of policies that matter, the establishments of both political parties differ little. As the political commentator Michael Malice says , “Conservatism is progressivism driving the speed limit”.

If we want an example of a “good” Democrat, we would have to go all the way back to Grover Cleveland’s presidency. Cleveland exercised considerable fiscal and foreign policy restraint throughout his two terms in office. Sadly, history textbooks overlook Cleveland’s presidency. In fact, Cleveland would struggle to fit in the bipartisan “statist quo” of DC politics these days. The fact remains that an activist government in both domestic and foreign affairs is the political norm in the Beltway.

In sum, Conservative, Inc. can gladly claim JFK as their own.

He offered the same big government policies both parties continue to promote while in power.

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