Ed Driscoll

Not Your Grandfather's Democratic Party

At Power Line, Steven Hayward ponders when economic growth became a partisan idea:

Our friend Bill Voegeli notes over on NoLeftTurns that Governor Tim Pawlenty’s goal of a sustained 5 percent economic growth rate is being met with derision practically across the political spectrum but especially from the know-it-all left, and yet the 1960 Democratic Platform called for exactly that same target: “We Democrats believe that our economy can and must grow at an average rate of 5% annually, almost twice as fast as our average annual rate since 1953. We pledge ourselves to policies that will achieve this goal without inflation.” And for the first half of the 1960s, the U.S. did indeed achieve this rate.

That was back in the heyday of “growth liberalism,” which was the particularly American form of Keynesian “fine-tuning” of the economy. Lyndon Johnson’s budget director, Charles Schultze, said, “We can’t prevent every little wiggle in the economic cycle, but we now can prevent a major slide.” It is important to recall that this was liberalism in its most optimistic phase, and two aspects of that long-ago liberal optimism are worth keeping in mind. One of the ironies of Paul Krugman and other liberals who now celebrate the 1950s as the economic golden age for the American middle class is that the growth liberals of that time, especially John F. Kennedy, were scornful of the Eisenhower Administration’s economic record. Recall Kennedy’s campaign slogan: “Let’s get the nation moving again.” Today that is Pawlenty’s de facto slogan.

Of course the other irony is that Kennedy and his growth-oriented economists saw cutting income tax rates as an important step toward reinvigorating growth, because, among other things, “a rising tide lifts all boats.” It’s worth recalling the full flavor of Kennedy’s view on this issue, as he explained to the Economic Club of New York in the fall of 1962:

Read the whole thing. As Steve says:

Any Democrat who talked this way today would be drummed out of the party, and would make Krugman’s head explode. (Hey, there’s. . . never mind.) Instead, Krugman, Robert Reich, and company are starting to wax nostalgic about the 70 to 90 percent marginal income tax rates of the 1950s, which they argue didn’t retard economic performance at all, thereby willfully forgetting the critique the growth liberals made of the slow-growth Eisenhower years.

But then, other than his haircut and his misadventure in unionizing public employees, there’s little about JFK that today’s left would approve.