An Unfinished Life: John F. Kennedy 1917-1963 (85 page)

Kennedy was not simply self-serving in deciding what to tape. He wanted a realistic record of what shaped events. If he hoped to demonstrate the inhibitions placed on presidential achievements, he could not solely tape flattering depictions of his effectiveness. The tapes certainly include discussions that little serve his historical reputation. Nor did he use the tapes to make speeches that would impress future listeners. As scholars Philip Zelikow and Ernest May have pointed out, he “could hardly have known just what statements or positions would look good to posterity, for neither he nor his colleagues could know how the stories would turn out.”

That said, holes remain. Three tapes, Zelikow and May add, may have been “cut and spliced, for two of these tapes . . . concerned intelligence issues and may have involved discussion of covert efforts to assassinate Castro.” It is also possible that embarrassing passages involving Marilyn Monroe and Judith Campbell Exner were removed. In addition, a small number of tapes may have been destroyed or lost. There are, for example, unopened transcripts at the Kennedy Library for four missing tapes, which may contain embarrassing revelations or national security secrets. By and large, however, the tapes seem to provide a faithful record of some of the most important events in Kennedy’s presidency, and of the constant burdens of a working president.

MAINTAINING ECONOMIC GROWTH
and lowering the unemployment rate were constant, daunting concerns in 1962. The stock market tumble on May 28 sent a wave of fear through the White House. Memos flew back and forth on how to bolster business and consumer confidence. Should the president make a statement? Kennedy’s advisers opposed the idea as likely to do more harm than good. Instead, Kennedy asked Congress to cut taxes.

From the perspective of forty years later, after Richard Nixon’s announcement in 1971 that “we are all Keynesians now,” and Republican advocacy under Reagan and both George Bushes of lower taxes, it is difficult to recapture the boldness attached to Kennedy’s requests in June 1962 for an immediate 40 percent reduction in corporate tax rates and comprehensive tax reform beginning in January 1963. Kennedy was convinced that America’s tax system was a drag on the economy, and he looked particularly to Western Europe, where tax rates were lower and growth double that of the United States. Heller concurred. Though Kennedy was not ready to provide details on “the range of the net tax cut,” it was clear that he would ask for a substantial reduction in the 50 percent rate that Americans in the $32,000 to $36,000 income bracket were paying and a cut in the 91 percent assessment on marginal income over $400,000.

In a national culture that put a high premium on frugality and balanced budgets, Kennedy faced considerable hostility from an orthodoxy preaching the economic and moral dangers of deficits and debt. A Gallup poll asking whether people favored a tax cut if it increased government debt showed 72 percent opposed and only 19 percent in favor. To contain public concern that he might be jeopardizing the nation’s future by risking unbalanced budgets, Kennedy described the tax reductions in terms of millions rather than billions: business was to get a $1,300 million tax credit rather than a $1.3 billion reduction; the potential budget surplus of $8,000 million, however, was stated as $8 billion, and the increase in the gross national product was also described as in the billions.

Opposition to tax cuts was not just on the conservative side. Ken Galbraith warned the president that “a very large part of American conservative and business opinion” would “argue with great enthusiasm for a tax reduction. . . . Of course, after the taxes are reduced, these people will . . . attack you for an unbalanced budget.” Galbraith saw “a nasty congressional brawl with a disagreeable aftermath. What will satisfy the liberals will outrage the rich and vice-versa. Both, in the end, will be angry at the Administration.” When JFK lectured Galbraith on the virtues of Keynesianism, Galbraith acknowledged his standing as “a charter member of the worshipful following,” but observed that “the orthodoxy is always one step behind the problem. And so it is now that Keynes is official.” Instead of a tax cut, Galbraith wanted an attack on “the infinity of problems that beset a growing population and an increasingly complex society in an increasingly competitive world. To do this well,” Galbraith advised, “costs the money that the reducers would deny.”

But Kennedy saw Galbraith’s iconoclasm as less convincing than Heller’s. The great economic challenge for Americans, Kennedy believed, was to abandon outworn clichés about deficits. In a commencement address at Yale in June, he asserted that “the great enemy of the truth is very often not the lie . . . but the myth,” the dogged attachment “to the clichés of our forebears . . . the comfort of opinion without the discomfort of thought.” And the myths about fiscal policy, he said, “are legion and the truth hard to find.” The experience of the last fifteen years demonstrated that old slogans about deficits creating inflation and surpluses preventing it were out of date. Public and private debt could fuel expansion and strength.

Kennedy’s sense of urgency about the tax cut increased at the end of June when Heller recounted the “storm signals . . . rolling in at a rapid rate. . . . A dozen top economists—of varying political and methodological hues—agreed that there was little hope for a spontaneous revival in the months ahead.” Moreover, in July, Heller worried that the “millions of stockholders who have recently taken a drubbing feel the Administration is rather detached and inert about the whole thing.” Toward the end of the month, it was clear that the economy remained sluggish. Although consumer purchasing had remained steady and some corporate profits were better than expected, business investment, on which economic expansion and lower unemployment depended, remained below expectations.

Yet the Congress was not ready, one opposing congressman even charging that the president had used “rigged data” to support a tax reduction. “It is clear,” Ted Sorensen told the president on August 9, “on the basis of the hearings now completed that neither this committee nor the Congress would approve an immediate tax cut before adjourning next month.”

Despite a jump in unemployment from 5.3 to 5.8 percent in August, and gloomy September estimates on the economy, Kennedy decided that political resistance made an immediate tax cut impossible. Believing it essential for the next year, however, he began trying to convert Wilbur Mills, the chairman of the Ways and Means Committee, to the idea. In two White House conversations in August, they agreed that the economy remained sluggish and would not expand as fast as they had hoped. But unless Congress saw the country as at least in a recession, Mills said, it would be reluctant to follow Kennedy’s lead. Kennedy conceded that a proposal would complicate the political lives of Democrats running for reelection in November. “If I go up and ask for a tax cut now,” he told Mills, it might suggest that the economy was troubled, that “the Democrats have failed to bring the economy back,” and that “they’re fiscally irresponsible. And a lot of bastards then come out and say they’re not for a tax cut, and . . . [they] will break with me. And in other words, it will make our problem almost impossible come November.”

With additional evidence in September and October that the economic expansion of 1961-62 was “running out of gas,” and that the AFL-CIO was increasingly unhappy with an administration that promised more than it delivered, Kennedy stiffened his resolve to press Congress to enact a landmark tax bill in 1963. But for now, he expected nothing.

In July, the White House had begun a series of meetings—luncheons, dinners, discussions—with business leaders and the business press. The president, the CEA, and cabinet officials briefed corporate chiefs on the state of the economy and the need for a tax cut to fuel expansion. Kennedy believed that the meetings were doing some good. After one July luncheon of businessmen at the White House, Thomas Lamont of IBM told the president that he seemed to be “fully aware of the important role which business plays in our national economy” and that his detailed knowledge of the problems businessmen faced had impressed his guests. In addition, his appeal to them for modern policies that left outdated economic thinking behind had had some effect.

Nevertheless Kennedy resented having to cultivate educated and generally sophisticated executives, many of whom seemed blinded by bias and self-doubt. The business community had lost confidence in itself, Kennedy told Schlesinger. “Whenever I say anything that upsets them, businessmen just die. I have to spend time and energy trying to prop them up.” A Gallup poll showing that only one in five businessmen labeled Kennedy as “anti-business” failed to convince the president that he could take them for granted.

The only unqualified point of agreement Kennedy had with his business antagonists was the need to reduce the unfavorable balance of payments. He still shared corporate fears of a gold drain that could force devaluation of the dollar and bring on economic disaster. His answer to the problem was the Trade Expansion bill he had put before Congress in January 1962, which would allow him to negotiate lower tariffs with Europe’s Common Market countries and increase U.S. exports. Seven months later, the bill still not passed, Kennedy called it “the most important measure to be considered by many a Congress . . . vital to the future of this country. . . . If we cannot make new trade bargains with the Common Market in the coming year,” he said, “our export surplus will decline, more plants will move to Europe, and the flow of gold away from these shores will become more intensified.” Kennedy predicted that expanded trade arising from passage of his bill would boost employment in the United States as well as bring the balance of payments under control.

Some opponents worried that the law would give the Japanese and Europeans trade advantages harmful to a variety of industries in the United States. But supporters of the bill invested it with miraculous powers. One distinguished columnist with a reputation for detached analysis saw the bill as “the unifying intellectual principle of the New Frontier.” Its failure would cause the United States “to default on power [and] resign from history.” Evangelists for the law like George Ball made a point of wearing “a suit made in Britain, shoes manufactured in Hong Kong, and a silk tie made in France.”

If Kennedy’s support did not run to that extreme, he nevertheless saw the bill as easing some of his difficulties with the U.S. business community as well as serving the national well-being. After the bill passed Congress by lopsided margins in October, he called it “the most important international piece of legislation . . . affecting economics since the Marshall Plan. It marks a decisive point for the future of our economy, for our relations with our friends and allies, and for the prospects of free institutions and free societies everywhere.” Yet as the coming year would demonstrate, the bill was no nostrum for the balance of payments, the U.S. economy, or the progress of freedom around the globe. Myth and illusion were not the exclusive preserve of the country’s business community or Americans wedded to balanced budgets.

THROUGHOUT 1962,
civil rights remained a distinctly secondary concern alongside domestic worries about the economy and the gold drain. In the first two months after he began taping important conversations, for example, Kennedy recorded numerous discussions about international affairs and domestic economic problems but absolutely nothing about civil rights, except for one brief discussion with Johnson about the CEEO. At the end of March, an unsigned White House memo pointed out that “the proper groundwork has not been laid for [civil rights] legislation in Congress. Negroes are not convinced that the Administration is
really
on their side. Southern whites still believe that the turmoil is a combination of ‘ward politics’ and ‘outside agitators.’ . . . If legislation is submitted to Congress before the moral issue is clearly drawn, the result will be disaster. The country will be exposed to several weeks of divisive and inflammatory debate. The debate is likely to come to no conclusion—thus disillusioning the Negroes and strengthening the bigots in their conclusion that the country is ‘really with’ them. The Republicans will have a field day. And in addition to the civil rights cause, the President’s whole program will go down the drain.”

The burden was on Kennedy, who needed to “make the kind of moral commitment” that would “rescue the situation and restore unity,” the memo advised. He should ask the three former presidents, Hoover, Eisenhower, and Truman, and Republican congressional leaders for help and to make clear to blacks that “
he is on their side because they are right.
” He also needed to make the moral case for civil rights in a nationwide TV speech and to hold face-to-face conversations with people across the South—“not as their antagonist, but as their President”—to educate them about “the simple rights and wrongs of the situation.”

It is not clear that Kennedy ever saw this memo, but he felt the heat anyway from civil rights advocates pressing for bolder action. The Civil Rights Commission urged him to support a voting rights law, but the president and Bobby were committed to a less comprehensive strategy—lawsuits against the worst offending southern counties. Seeing this as a form of incrementalism producing uncertain results, the commission planned to hold hearings in Louisiana and Mississippi, where the most pronounced abuses existed, to underscore the need for legislation. Afraid that the commission’s presence in the Deep South would touch off “large scale” violence, Kennedy’s Justice Department resisted.

By 1962, Father Hesburgh and Bobby were locked in a bureaucratic conflict that stunned Harris Wofford and provoked the president’s intervention. Bobby called the commissioners a bunch of “second-guessers” and complained that they were making it more difficult for him to accomplish what needed to be done. “I didn’t have any great feeling that they were accomplishing anything of a positive nature,” Bobby recalled. “It was almost like the House Un-American Activities Committee investigating Communism. They were investigating violations of civil rights in areas in which we were making investigations. I thought that they could do more in the North.” “It’s easy to play Jesus and it’s fun to get into bed with the civil rights movement,” a Justice Department attorney said, “but all of the noise they make doesn’t do as much good as one case.” But Hesburgh, who saw the commission as a “burr under the saddle of the administration,” refused to back off.