U.S. Politics and the Global Economy: Corporate Power, Conservative Shift

By Ronald W. Cox; Daniel Skidmore-Hess | Go to book overview
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THE “NEW LIBERALISM

The Democratic resurgence in the congressional and presidential elections of 1958–1960 was helped by recession as well as Sputnik. Eisenhower's policies of tight money and tight budgets may have protected the dollar but did little for the Republican Party. In this context, a liberal politics of growth and military nationalism gained broad appeal. Within the administration, Vice President Nixon had understood the political ramifications but was unable to move the administration back to its earlier partial embrace of Keynesian demand stimulus. As to the leading Eisenhower Keynesian fighter of the 1954 recession, “after leaving the administration, Burns became concerned about the slow pace of economic expansion and helped to draft the Rockefeller Brothers Fund panel reports which advocated tax reduction and higher government expenditures on selected programs, notably education, urban renewal, energy resources and highways to boost economic growth.” 76 Along with the public, then, key members of the internationalist business sector were growing concerned with the relative slowness of U.S. growth rates as compared with those of Germany, Japan, and even the U.S.S.R. With due consideration for the dollar's constituency, the agenda for the Kennedy-Johnson years would be to encourage growth with more guns, more butter, lower taxes, and the continued pursuit of free trade within the Bretton Woods framework. However, the stresses in the Bretton Woods system, already apparent by the end of the Eisenhower years, would continue to fester and grow as the international context grew more competitive.


NOTES
1
On coming into office, the Eisenhower administration revised the FY 1954 budget expenditures from $78.6 billion down to $68.7 billion. John W. Sloan, Eisenhower and the Management of Prosperity (Lawrence: University Press of Kansas, 1991), pp. 69–73.
2
Interestingly, the Chamber of Commerce moved to endorse free trade during this period, despite its diverse and often combative membership at the local level.
3
In a generally sympathetic “revisionist” account of the Eisenhower administration, Iwan Morgan refers to the Business Advisory Council as “the executive committee of the nation's corporate elite.” Iwan W. Morgan, Eisenhower Versus the Spenders (New York: St. Martin's Press, 1990), p. 8.
4
But it is significant that the Kennedy-Johnson period would witness the maintenance of relatively conservative monetary policy by a central bank that had gained greater autonomy in its 1951 showdown with the Truman Treasury Department.
5
Sloan, Eisenhower and the Management of Prosperity, p. 69.
6
Ibid., p. 74.

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