John F Kennedy became President when the economy was in a mild recession, a recession said to have begun in 1960 during the Eisenhower administration. That recession has been described as the Federal Reserve's fear of inflation and the Fed reducing the money supply and raising interest rates. When the November elections approached, economic activity was shrinking and unemployment had risen to 6.6 percent. Richard Nixon was to claim that the recession cost him the election.
Kennedy (in January 1961) began his presidency saying he wanted to get "the country moving again." In his first State of the Union Address he said he would "propose to the Congress within the next 14 days measures to improve unemployment compensation... to provide more food for the families of the unemployed, and to aid their needy children... to stimulate housing and construction", and more.
Kennedy wanted to get money into the economy fast. He directed all Federal agencies to accelerate their procurement and construction. He released over a billion dollars in state highway aid funds ahead of schedule. He raised farm price supports and advanced their payment, speeded up the distribution of tax refunds and GI life insurance dividends. He created a "pilot" Food Stamp program for the needy and expanded US Employment Offices. Finally, he encouraged the Federal Reserve Board to help keep long-term interest rates low through the purchase of long-term bonds.
In an address to a Joint session of the United States Congress on May 25, Kennedy announced full presidential support for the goal to commit "before this decade is out, to landing a man on the Moon and returning him safely to the Earth," and he urged Congress to appropriate the necessary funds.
Kennedy has been described as a Keynesian president. True or not, he wasn't shy about federal spending. He didn't have Eisenhower's concern about balance budgets. He was interested in economic expansion without inflation. In 1962 he was infuriated by steel companies raising the price of their steel (3.5 percent by US Steel). He spoke of his father having described all businessmen as sons-of-bitches, and at a news conference the next day he spoke of "a tiny handful of steel executives whose pursuit of private profit and power [showed] utter contempt for the interests of 185 million Americans." Kennedy had Defense Department contracts shifted to companies that had not raised prices, and his congressional allies promised antitrust investigations. There was talk of Internal Revenue agents checking the expense accounts and hotel bills of steel company executives. Relations with the business community is described as having turned chilly. Republicans were complaining. There were negotiations with ten of the eleven steel companies, and on April 13 (1962) the companies rescinded their price increases. But Kennedy is described as having won the battle while losing the war: US Steel chose profits over patriotism and announced that its new plants would be built abroad.
Also in 1962, unemployment remained high. Kennedy moved to enact medical care for workers over 65 under Social Security. The bill failed in the Senate after defections by key Democrats. Kennedy then decided that only a bold domestic program, including tax cuts, would restore his political momentum. This was not the kind of tax cutting Republicans would be advocating. Kennedy was cutting income taxes from a top marginal rate of 91 percent to a "more sensible" 65 percent (the top rate in 2018 is 37 percent), and he was for cutting in the corporate tax rate from 52 to 47 percent. There would be descriptions of Kennedy's tax cutting as myth, including an article titled "The Myth of JFK as Supply Side Prophet". At any rate, Republicans and conservative Democrats in Congress complained that reducing taxes without spending cuts was not acceptable. Kennedy countered that "a rising tide lifts all boats" and that strong economic growth would not continue without lower taxes. Kennedy was expecting economic growth to cover the increase in government debt and his lack of interest in Eisenhower's balanced budgets.
Indeed, during the Kennedy presidency the economy averaged a growth rate of 5.6 percent per year. Kennedy added $23 billion to the national debt, but as a percentage of GDP the gross national debt declined. This was with inflation (the price of stuff) remaining steady at around 1 percent.
Goldwater, meanwhile, had criticized Kennedy for trying to revive New Deal policies which, he said, were proven failures. Goldwater complained that Kennedy's welfare policies were too much of an extension of federal power and said he didn't like seeing areas of economic growth penalized by having their money taken away to help other areas.
In his first State of the Union Address in January 1961, President Kennedy said:
The denial of constitutional rights to some of our fellow Americans on account of race — at the ballot box and elsewhere — disturbs the national conscience and subjects us to the charge of world opinion that our democracy is not equal to the high promise of our heritage.
President Kennedy was cautious about angering many Southern whites and making it more difficult to pass civil rights and anti-poverty legislation. But in May his brother, Attorney General Robert Kennedy, spoke to students of the University of Georgia School of Law in Athens, Georgia, promising to enforce civil rights legislation.
Later that month, a mob at the Greyhound Bus Station in Montgomery Alabama assaulted Freedom Riders, attracting international attention. The Freedom Rides continued. By the end of the summer of '61 in Mississippi's prison at Parchman more than 300 Freedom Riders were enduring beatings, inedible food, repeated strip searches and prison officials confiscating the blankets and mattresses of all of the activists — a make them suffer approach. But it didn't help the segregationists. At Robert Kennedy's insistence, new rules were issued ending discrimination in interstate travel.
By November all interstate buses were required to display a certificate that read: "Seating aboard this vehicle is without regard to race, color, creed, or national origin, by order of the Interstate Commerce Commission." In December in Georgia arrests of Freedom Riders sparked mass demonstrations, and hundreds of protesters were arrested. In February 1962, the US Supreme Court ruled segregated transportation facilities, both interstate and intrastate, as unconstitutional. In Mississippi in September, James Meredith was barred from enrolling at the University of Mississippi. The US Supreme Court ordered Meredith admitted, and when he enrolled white rioting followed, killing a French photographer and a Mississippi resident.
In January 1963, incoming Alabama governor George Wallace said in his inaugural address: "segregation now, segregation tomorrow, segregation forever." In April, Dr King was arrested in Birmingham for "parading without a permit," his "Letter from Birmingham Jail" followed. On June 9 in Mississippi the activist Fannie Lou Hamer was among several SNCC members beaten and jailed while working on voter registration.
On June 11, Governor Wallace stood in the door of the University of Alabama to block the enrollment of two African Americans: James Hood and Vivian Malone. The Kennedy administration put the Alabama National Guard under the command of the federal government. And, facing arrest, the tough-talking governor stepped aside. That same day, President Kennedy addressed the nation and moved beyond his previous legal appeals to assert that racial equality was a just cause and a "moral cause to which all people need to contribute."
Later that night, civil rights activist Medgar Evers, who had been listening to Kennedy's remarks on the radio, was assassinated as he returned to his home in Jackson, Mississippi. At his first trial the alleged assassin, a founding member of Mississippi' White Citizens Council, would be greeted with a handshake from Governor Ross Barnet, and he would be set free after two all-white juries deadlocked.
Southern legislators despised Kennedy's June 11 speech. Mississippi's Senator John Stennis vowed to resist Kennedy's proposals, declaring that they were "clearly unconstitutional and would open the door for police control of employment and personal associations in almost every field. Georgia's Senator Richard Russell Jr claimed that passage of such a bill would be the beginning of transformation into "a socialistic or communist state." Senator Strom Thurmond called for Southern Democrats to boycott Kennedy's legislative agenda in its entirety until he backed down on civil rights. Senator George Smathers of Florida, a longtime friend of Kennedy, said: "I could agree with almost everything the President said, but I don't really believe we need additional legislation. There are plenty of laws on the statute books, and the way the courts have been operating, there is no need of additional legislation to give the Negro his every right."
CONTINUE READING: Kennedy's Crises in Berlin and Vietnam
Copyright © 2018 by Frank E. Smitha. All rights reserved.