Great Society history lesson II

Now that at least 80 million Americans are on what used to be called “welfare” (see “Pandemic Swells Medicaid Enrollment to 80 Million People, a ‘High-Water Mark’”), perhaps it is time to revisit Great Society: A New History which describes the origin of the no-longer-called-welfare program on which nearly 25 percent of Americans now rely. (Previous post: Bitcoin has plenty of runway if we look back to the 1960s and 70s and the Great Society)

What’s the history of the program?

The costs of the previous legislation Johnson had pushed Mills into had already far outrun the projections. Budget officials had predicted that Medicaid, for example, would cost less than $ 400 million in fiscal 1967. Instead it had cost $ 1.1 billion.

Compare to $613 billion in Medicaid spending in 2019 ( which presumably is now closer to $800

Why do Californians love bigger government so much?

The value of the private sector’s relationship with the government seemed especially obvious in the Western state that Americans regarded as the land of the future, California. For many Californians, the government was their job. More active-duty military and civilian Defense Department employees were stationed in California than in any other state. The presence of Pentagon money in California wasn’t merely large, it was overwhelming. 4 In one year, 1959, the Defense Department was awarding more than $ 3 billion in contracts to four aerospace firms in Los Angeles.

The author reminds us of the good old days of computing, before we got everything from Taiwan chip fabs:

In the mid-1950s, GE was a far richer company than IBM. General Electric had the resources necessary to get into computers, the computer fans reckoned, whatever Cordiner said. A clutch of engineers did manage to land a successful contract with the Bank of America for an innovative check sorter, the first computer system for banking applications, a testimony to the gumption of GE professionals and, ironically, to Cordiner’s own culture of department autonomy. California was the home of Bank of America, and also the home of the GE group that won the contract. The machines would serve the Sacramento, Fresno, Los Angeles, and San Diego areas. But California was a state where GE could endure the same troubles with organized labor as it did out East. GE internal reports noted that the company was looking to avoid the Golden State’s “punitive labor legislation.” GE based production of the project’s computer, weight 23,000 pounds, in Phoenix.

Unions can play an important role in expanding government for all:

Building a union that could beat the automakers at the negotiation table sounded like enough work, but Reuther also, early on, decided he wanted more. Reuther was falling in love with Northern Europe’s social democracies, countries where democratic government supplied health care and good schools, and even, Reuther noticed, funded time at worker spas for workers to recover from strenuous labor. It seemed to Reuther there was no reason America could not replicate the Scandinavian model. In the 1940s, Lem Boulware spoke at a graduation at Harvard University, making an early case for Boulwarism. During the same years Reuther gave the commencement address at Howard University, the historically black college in Washington. At Howard, Reuther said that U.S. unions needed to deliver better housing and medical aid to all Americans, not just union members. Otherwise, unions weren’t worth much. “The test of democratic trade unionism in a democratic society,” Reuther said, “is its willingness to lead the fight for the welfare of the whole community.”

The unions did beat the Detroit automakers, of course, but Detroit didn’t end up quite as prosperous as President Lyndon Johnson expected.

It was Detroit in particular that was, Johnson said [in May 1964], “the herald of hope in America. Prosperity in America must begin here in Detroit.” … If labor and industry would stick by his side, the president said, “the sky is the limit, and the sky is bright today.”

In the past, presidents had striven for abundance, Johnson noted. Now the country had abundance. The challenge of the next half century was proving “whether we have the wisdom to use that wealth to enrich and elevate our national life.” Some corners of the country were still poor. The Great Society, therefore, required, as Johnson had said before, an “end to poverty.”

See also Decline of Detroit (Wikipedia): “The population of the city has fallen from a high of 1,850,000 in 1950 to 680,000 in 2015 … Local crime rates are among the highest in the United States … and vast areas of the city are in a state of severe urban decay.” And Detroit bankruptcy (Wikipedia): “The city of Detroit, Michigan, filed for Chapter 9 bankruptcy on July 18, 2013. It is the largest municipal bankruptcy filing in U.S. history by debt, estimated at $18–20 billion…”

The central planners didn’t do a great job after World War II, but we can rely on them today…

Harrington took a frank position on the shame of urban renewal, in which unions had been complicit. After World War II, the unions had joined the federal government in a great plan to rebuild the cities. The bulldozers obliterated the slums, but also evicted entire black communities like Paradise Valley. This was not “urban renewal,” it was “Negro removal,” as the writer James Baldwin said. Two-thirds of the families displaced by urban renewal were black. Harrington argued that when the heavy equipment, whether Dwight Eisenhower’s in the past or new presidents’ in the 1960s, arrived at so-called slum neighborhoods, it crushed untold value. Old slums hadn’t merely been slums; they had been starting points: “there was community, there was aspiration.” New communities did not come to life in the new projects. The projects were cages that became graveyards. Harrington noted that the new housing that supplanted old tenements created “a new type of slum,” which isolated black families in ghettos. Harrington had seen the new type of slum firsthand in his hometown, St. Louis, where black families had been moved out of the Mill Creek areas to one of the largest of the urban renewal public housing projects in the country, Pruitt-Igoe.

Presidents Biden and Harris might be highly successful at transforming the U.S. via legislation:

And Johnson also could count some advantages of his own. First, there was his long record in the Senate, which gave him unparalleled experience as the shepherd of legislation. Roosevelt, a mere governor with a famous name, had had nothing like that. There was also the aching advantage of tragedy: Kennedy’s death would make Congress eager to pass Kennedy’s tax law and Kennedy’s languishing civil rights bill.

What are the parallels to today? Biden was in the Senate for decades and the U.S. is only now beginning to recover from the tragedy of rule by Donald Trump. Another parallel to today:

Moynihan noticed an irony. Whether a program’s beneficiaries were black or white, its planners were white. Blacks were scarcely present in all the work undertaken for the disadvantaged. Indeed, Moynihan later wrote, “at no time did any Negro have any role of any consequence in the drafting of the poverty program.”

The Great Society programs were supposed to get cheaper over time, as Americans realized that it was far better to work than to consume entitlement benefits:

At the August 20 signing ceremony, Johnson took further pains. The president told the public that the Economic Opportunity Act did not represent a “a handout or a dole.” He continued: “We know—we learned long ago—that answer is no answer. The measure before me this morning for signature offers the answer that its title implies. The answer is opportunity.” Spending now would bring savings later. Johnson promised the voters that this law would reduce the costs of “crime, welfare, of health and of police protection.” The act would yield a new era, and “the days of the dole in our country are numbered.” America would remember the 20 percent in poverty, the “forgotten fifth.”

Even today’s haters at the WSJ loved these ideas:

The Wall Street Journal characterized the law as “an opportunity to eradicate poverty, not opiate it.”

(Can we give them credit for prescience regarding opioids?)

Was President Johnson right about increased spending on government handouts cutting the cost of the police? Urban Institute: “From 1977 to 2018, in 2018 inflation-adjusted dollars, state and local government spending on police increased from $43 billion to $119 billion, an increase of 175 percent. Over the same period, real corrections expenditures increased from $18 billion to $81 billion, an increase of 350 percent.”

Ronald Reagan tried to talk Americans out of the idea that the path to salvation started with a much bigger government.

Reagan targeted the Office of Economic Opportunity. “Now do they honestly expect us to believe that if we add $ 1 billion to the $ 45 billion we’re spending . . . do they believe that poverty is suddenly going to disappear by magic?” Reagan also assailed the new camps being built for young workers. Room and board for each young person cost $ 4,700. Harvard tuition at $ 2,700 was less than that. Reagan took his jab at the college, and at Johnson’s misty affection for a humanities education: “I’m not suggesting Harvard is the answer to juvenile delinquency.” … America, Reagan said, was at a key moment—the country must choose whether it was a collectivist nation or a free one. The title of Reagan’s speech was “A Time for Choosing.” In early November the nation chose. It elected Johnson with an overwhelming majority.

We had faith then and have faith now!

To be continued…

More: Read Great Society: A New History

20 thoughts on “Great Society history lesson II

  1. Poverty is defined as a certain percentage of median income and wealth; as an economic category it is not going to disappear unless wealth and income become uniform or at least as a step distribution with a broad first step: i.e. 80 % of people on uniform income or at common regulated minimum salary. Poverty as starvation/absence of clothes to wear category as emotionally described in Les Misérables is long gone in this country for 99.99% of population without extreme mental issues (maybe not in North Korea, Cuba or Venezuela)

    • Poverty is flying an SR20-G2 when everyone else has an air-conditioned SR22-G6! Let me tell you from personal experience… poverty is extremely uncomfortable!

    • In other breaking news: Half of all people are of below-average intelligence!

  2. Let’s not forget democrat LBJ’s infamous quote when he was speaking about his “Great Society” welfare plan (as heard by two governors while on Air Force One): “These Negroes, they’re getting pretty uppity these days and that’s a problem for us since they’ve got something now they never had before, the political pull to back up their uppityness. Now we’ve got to do something about this, we’ve got to give them a little something, just enough to quiet them down, not enough to make a difference … I’ll have those n*ggers voting democrat for the next 200 years.”

    • @Lucius, where is the movement to remove statues of LBJ? What about renaming parks, buildings, streets, et al that bear his name? Where are the updated school text to educate us that LBJ was a racist and took advantage of the blacks?

  3. Johnson was a pretty awful president, the spending and lose money of the sixties, a fed chairman Arthur Burns who turned on the fed’s faucets to keep the money flowing and LBJ happy — all of which was paid for in the high inflation and decade long stagnation of the 70s as well as Vietnam. But i suppose you could say in LBJ’s favor that the Great Society was sort of a new idea and who’d have thought that it would both be unsuccessful and lead to a decade long stagnation culminating in a big recession when the Fed & the great Paul Volker forced short term rates to around 16% to bring down inflation? Biden and Jerome Powell don’t have that defense.

  4. “More active-duty military and civilian Defense Department employees were stationed in California than in any other state.”

    In MA, large government defense contractor Raytheon put bread on the table for four generations of my family. My 95-y/o grandmother is still collecting my grandfather’s Raytheon pension and he died in 1980.

  5. “Northern Europe’s social democracies, countries where democratic government supplied health care and good schools…”

    “Good schools.” It’s demographics. Northern Europe doesn’t have…err…ummm…nevermind.

  6. Look at the ongoing human wreckage catastrophe: 41% of Baltimore public school students 2020-2021 have a 1.0 or lower GPA. Even Mr. Kroger had a 1.2 at the top of the Delta pledge class.

    Is Randi Weingarten ready to pay the bills? She’s been steadfast throughout the entire charade, supported by the academics and intellectuals on NPR, and apparently untouchable in her position, which has gifted several of her fellow travelers to the Biden Administration. At least we know Statehood will save D.C.!

  7. It’s easy to complain about things America seemingly doesn’t do well. If we stipulate that a bell curve describes the distribution of just about everything, including: intelligence, mental health, physical health, productivity and wealth, how is it possible to construct a society where everyone can compete for limited resources and carry their own weight? What are we supposed to do with the folks at the far left of the bell curve, the freeloading welfare recipients who burden us with awful taxes while they live the high life? Do we just let them starve and die in the streets? Do we throw them in jail for eventually following basic human survival instincts, which would lead anyone hungry enough to eventually steal to eat or to find shelter by pitching a tent in a city wherever possible(until the cities outlaw this). Let’s just throw them all in jail at a cost of $40k/year–that sounds much better.

    If we consider things like freedom, tax rates, GDP, wealth, happiness, education, etc., and America is doing it so wrong, who’s doing it right? If the problems are as obvious as Philg makes them out to be–high taxes, welfare freeloaders, inept government, etc.–surely the solutions are just as obvious and some society on this planet has figured them all out! If America sucks, where do we go?

    • There was a meme that said something like:
      difficult times create strong men
      strong men create good times
      good times create weak men
      weak men lead to difficult times

      maybe PhilG’s complaints are a meta point about the cycle?

    • @SenorPablo

      How about we start by requiring that welfare and aid recipient show proof of progress and good use of goods they are getting for free? How about making it harder to get on welfare and limiting how long you can be on it? How about we make it a requirement that welfare and aid recipient find work and/or go to school and learn a trade? After all we have a lot of job opening but no one seems to want to work. We have community schools that cost almost $0 but no one on welfare seems to want to learn.

      And how about we stop adding more people to the welfare recipient list by stopping illegal immigrants and only accept those that add value to USA rather than accepting anyone who claims asylum from whatever it is that their native country government cannot protect them from or won’t add them to their country welfare program?

      What’s funny is this, we have laws in the books for all the above, but those laws are bent and ignored. If we enforce the exiting laws — just like we are enforcing masks, lockdowns and jabs for Covidfear — the “bell curve” you mentioned of society would be flatten, wouldn’t it?

    • George – How many more government employees would be needed to implement your proposed anti welfare abuse solutions? It sounds like it would be an awful lot to me. Also, isn’t it odd to suggest that folks who’ve already demonstrated a strong predisposition against societal norms would go along with any of what you suggest and produce any different outcome? As for the current laws not being enforced, we already have the highest incarceration rates–how’s that working out for us? Our criminal justice system doesn’t seem to be productive.

    • Senorpablo: “Where do we go?” is a great question! If the U.S. becomes a stagnant government-heavy society, as the U.K. did (from WWII through 1979), the answer might be “don’t go anywhere, but invest all of your money overseas”. The UK was still a good place to live even if it wasn’t a good place to build a career, run a factory, etc.

      The other reason to go nowhere is that other countries won’t take us. The U.S. is the world’s only open-border country (just walk in and say “I claim asylum”).

      But if one could easily immigrate into another country and one wanted to be productive, has useful recommendations of where business freedom prevails. Singapore is #1, of course! Switzerland might be the best compromise of global connectivity, great recreational opportunities, and business freedom.

    • @Senor,

      We don’t need more government employees, we have more than enough. Ask, no force, the current employees, to work 40 hours a week and to the age of 65.

      We won’t have higher incarceration rate if we enforce existing current laws. Start with public schools. If we can fire lazy and under performing teachers and even close, yes close, failing public schools, we would end up with a better educated sociality and thus less incarceration.

      Our public school system is so broken, especially in the inner cities and anytime we try to reform it, the teachers go up in arms.

      Our government is able to force masks, lockdown and jabs against the public and the public seems to be welcoming all this with open arms because they don’t want to “die” of Covid. Shouldn’t our government also force similar laws against the public to save them from themselves for being dumbed down? And shouldn’t the pubic accept such measures?

      The only solution I have seen from our government has been free hand-outs with no strings attached. The $300 a month per child is the latest example. That money, while labeled for “child” is going to the parents and they can spend it anyway they want. Chance are good many children will not see a penny out of it and the parent will spend it on non essential things.

  8. ” The U.S. is the world’s only open-border country (just walk in and say “I claim asylum”).”

    Ha, just a taggeringly ignorant belief.

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