It’s that 70s show all over again…

(copyright)

The WALTHER REPORT

By Tony Walther

Maybe history really does repeat itself.

We borrowed heavily to fight an unpopular war, the cost of social programs and the growth of big government went unchecked, and then we faced a major energy crisis. The end result was a strange heretofore unheard of condition in which there was inflation in the economy (prices went up) and stagnation (less demand for goods and services) at the same time, seemingly violating the sacred capitalist rule of supply and demand. It was tagged “stagflation.”

All these things happened in the late 1960s and the 1970s (the latter being the era of stagflation).

And all of these things are happening today in the later 2000s.

I recall that back during the buildup of the Vietnam War there was a debate as to whether the Johnson administration could offer both “guns and butter.” Those old enough will recall that Lyndon Johnson pushed through the most ambitious program of social legislation since FDRs New Deal. Johnson called his “The Great Society.” Medicare and Medicaid were enacted, along with a whole host of social welfare programs. And remember folks, back then the impetus was not only to help poor folks of color (Blacks and Hispanics), but poor white folks too. There were news reports and documentaries done about the abysmal living conditions and the high unemployment and lack of education among white folks living in Appalachia (strangely enough, some of the same problems and similar reports come out of that region today).

At the same time, Johnson was pushing our nation into a major military land offensive in Vietnam, hence the afore mentioned paradox, producing both “guns and butter.”

Johnson and his successors chose to do it in what has become the “American way” these past many decades, they borrowed it. Rather than to call for sacrifice for the war effort and to levy sufficient taxes, they chose to put off paying for it. But the piper must be paid.

George W. Bush faced a crisis not long after coming into office, 9/11. The evidence seems to suggest that Bush was predisposed to go to war with Iraq, well before 9/11. (Johnson was predisposed to fight in Vietnam because of the domino theory on the spread of communism and the fear of being blamed for losing more ground to the commies.)

After 9/11, the prevailing mood in the country was that we had been attacked and we needed to strike back. Bush struck first at Afghanistan where Osama bin Laden, the apparent culprit behind 9/11, was holed up, and that seemed prudent, but then Bush conveniently morphed it into a war in Iraq. And I apologize for boring anyone with this all over again, you know the rest.

But the point is, there was uncertainty and debate in the government as to whether Bush’s war policy was correct. But as in Vietnam, the war was not the result of a declaration of war by congress, as the U.S. Constitution provides for, but resolutions passed by congress, essentially giving Bush carte blanche to fight a “war on terror.”

In the same way, President Johnson and his successor, Richard Nixon, used the “Gulf of Tonkin” resolution to fight an undeclared war in Vietnam.

(Something tells me, though, that Bush’s war on terror resolutions more closely represent declarations of war than the Tonkin resolution, but the end result in both cases was unconditional permission to wage war given to the president. Can congress legally abdicate its responsibility to declare war? The whole issue of when and how we should go to war, properly following the Constitution, has never been officially resolved since Korea and Vietnam.)

In any event, we have come full circle into a situation in which we are paying on credit for a costly war, government spending in general is way out of control, and we once again face an energy crisis. And now stagflation has reared its ugly head. We seem headed deeper and deeper into an economic downturn, with higher unemployment, and, meanwhile, inflation, the cost of most everything we buy is going up. Inflation, plus stagnant economy = stagflation.

We would have been better off to avoid a costly war (defense is necessary, offense, maybe not so much). We should try to pay as we go (unfortunately that means taxes, but at least we can choose to not do as much, hence, lower taxes). We need to become energy independent (something we knew way back in the 70s).

If history really does repeat itself, it may be because we never learn.

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