The Fabulous, But Flawed Economy Of 1964 – Jan. 5, 1964
The economy of 1964: More robust, more profit, more expansion than at any other time in U.S. history. The numbers of newly minted wealthy were getting higher by the minute.
But while the rich were getting richer, it was also equally apparent that the poor were getting poorer. And even though our wealth was piling higher in some coffers, it wasn’t being distributed well. Fully a fifth of the nation was at or below poverty, and the U.S. had the highest unemployment rate of any other modern Western country.
The question on most people’s minds in 1964 was; what was this fabulous, but flawed economy going to do in the coming year?
This episode of ABC’s Issues and Answers features Commerce Secretary Luther Hodges and Labor Secretary Willard Wirtz discussing the then-current situation facing the Johnson White House. Hodges was upbeat and optimistic, saying 1964 was going to be a good year and there would be a renewed spirit of confidence in the economy. While Wirtz agreed, for the most part, was understandably pessimistic that everyone would not be getting their fair share of this new economic boom, since the numbers of unemployed weren’t getting any better.
The perennial carrot being dangled by Congress was a proposed Tax Cut for 1964-1965. The question was, what would happen if there was no tax cut? Hodges felt there would be not as much economic activity, and that some $10-15 billion in GNP would be lost as a result. Wirtz felt roughly the same, adding that there would be some 2 million fewer jobs without the tax cut than with the tax cut. However, both were confident the Tax Cut proposal would pass Congress.
More than that; the economy was changing because the workplace was changing. Automation was becoming a reality and a whole set of new problems were posed. According to both Hodges and Wirtz, it was estimated some 34 million new jobs were needed during the decade of the 1960s to meet the demands of new technology, or some 50-60,000 new jobs per week. Where Hodges and Wirtz disagreed was how that would be accomplished. Hodges felt private industry would be able to train employees for these new jobs, while Wirtz felt government assistance in the area of education in order to train the large number of unemployed; minorities and youth, was the imperative.
The hope was, that the private sector would step up to the plate, rather than rely on the government to provide assistance in education for minority and youth unemployed. That State and Local governments would take a more active role in poverty and education programs – slum clearance and school construction.
This was 1964, and there was a new President. Lyndon Johnson had taken over in the wake of the JFK assassination. And as much as LBJ was pledged to continue the plans of his predecessor, he also had his own projects. One of those was the much publicized War on Poverty. There was the honeymoon period with both Labor and Management agreeing that LBJ was “their man” and that taxes could be cut and prosperity could continue simultaneously.
The one interesting caveat that both Hodges and Wirtz mention was the hope that budget cuts would be made in Military and Defense programs. As history has shown, the Military-Industrial Complex warned about by outgoing President Eisenhower would play a huge part by the end of 1964 – and our involvement in the war in Vietnam would become the drain on our economy, as well as the fuel for unrest. As we all know by now, war is good for business – and when the government covers the tab, programs to help those in need and those in search of a better life get placed far down on the priority list.
Here is that discussion between ABC News correspondent Howard K. Smith, Luther Hodges and Willard Wirtz from January 5, 1964.