Tuesday, February 11, 2014

Lyndon Johnson's War on Poverty Speech

Lyndon Johnson declared "war on poverty" during his State of the Union address on January 8, 1964. A half-century later, here are a few things that struck me in looking back at that speech.

1) Johnson is frontal and direct in declaring the War on Poverty. As one example of several, he says: "This administration today, here and now, declares unconditional war on poverty in America. ... It will not be a short or easy struggle, no single weapon or strategy will suffice, but we shall not rest until that war is won. The richest Nation on earth can afford to win it. We cannot afford to lose it. ... Poverty is a national problem, requiring improved national organization and support. But this attack, to be effective, must also be organized at the State and the local level and must be supported and directed by State and local efforts. For the war against poverty will not be won here in Washington. It must be won in the field, in every private home, in every public office, from the courthouse to the White House."

2) Johnson's announced strategy in the War on Poverty is focused on offering a fair opportunity to all, not on redistribution of income. He said, "Our chief weapons in a more pinpointed attack will be better schools, and better health, and better homes, and better training, and better job opportunities to help more Americans, especially young Americans, escape from squalor and misery and unemployment rolls where other citizens help to carry them. Very often a lack of jobs and money is not the cause of poverty, but the symptom. The cause may lie deeper in our failure to give our fellow citizens a fair chance to develop their own capacities, in a lack of education and training, in a lack of medical care and housing, in a lack of decent communities in which to live and bring up their children."

3) Johnson combines the War on Poverty with a pledge for lower spending, lower budget deficits, and reduced federal employment. Johnson said: "For my part, I pledge a progressive administration which is efficient, and honest and frugal. The budget to be submitted to the Congress shortly is in full accord with this pledge. It will cut our deficit in half--from $10 billion to $4,900 million. It will be, in proportion to our national output, the smallest budget since 1951. It will call for a substantial reduction in Federal employment, a feat accomplished only once before in the last 10 years. While maintaining the full strength of our combat defenses, it will call for the lowest number of civilian personnel in the Department of Defense since 1950."

These promises were largely kept. The budget deficit was 0.9% of GDP in 1964, and LBJ pledged to make it still smaller. Indeed, the deficits were 0.2% of GDP in 1965 and 0.5% of GDP in 1966. After the enormous levels of debt taken on to fight World War II, the economy grew faster than the government debt through the 1950s and 1960s. In particular, the ratio of  federal debt held by the public had  been 108% in 1964, but it had already declined from 40% in 1964 and fell further to 28% by 1970.

4) Johnson's War on Poverty comes when the U.S. economy is about to run white-hot. In January 1964, the unemployment rate was 5.6% as the U.S. economy emerged from a recession that had bottomed out in February 1961. By February 1966, the monthly unemployment rate would fall under 4%, and would stay there through January of 1970. There has been a widespread belief among economists that the "guns and butter" policies of that time (that is, a combination of the Vietnam war and new social program) helped pave the way for some of the inflationary pressures of the 1970s. But the powerful economic growth made it an ideal time to seek to reduce poverty.

5) Johnson's war on poverty speech much shorter than modern State of the Union addresses. Checks in at about 3200 words. For comparison, Barack Obama's 2014 State of the Union address ran more than twice as long at over 6700 words.

6) The "War on Poverty" as defined in the 1960s has largely been won. Yes, the official poverty rate remains high, but the poverty rate is prone to some well-known difficulties: it doesn't take non-cash assistance programs like food stamps and Medicaid into account. Nor does it take into account that those with low-incomes today have access to technologies that affect their lives in so many ways, including household appliances, health, transportation, diet, and many more. When these kinds of factors are taken into account, we have largely won the war on poverty as the poverty level was defined it in 1964.

But this victory is a slippery one. Poverty is always defined in the context of a place and time. After all, Johnson could have pointed out that the U.S. had already largely won the war on poverty as poverty would have been defined a half-century before his speech, back in 1914. What it means to be poor in 2014 is in some ways quite different than in 1964, after the passage of Medicaid, the expansion of food stamps, the passage of the Civil Rights Act of 1964, and more. However, poverty in 2014--especially in terms of lack of opportunity for many Americans who lack support in their communities, schools, local economy, and sometimes their families--is a real and genuine problem of our own time and place.