“Consumer demand had risen sharply in 1965 in response to the Tax Reduction Act of 1964. Business had spent heavily on new plants and equipment to meet this rising demand. At the same time the government was increasing its expenditures for programs of social reform. Still, all these demands were being met until the economy ran into the sudden and sharp expansion of defense requirements. Together with other expansions, the defense costs pushed total demand beyond the speed limits at which production could be expanded. Something had to give. Prices started to move up in 1965. As living costs rose, workers sought higher wages. These in turn raised the costs of production. Faced with higher production costs and strong markets, producers sought to raise their prices still further. This was the chain reaction that resulted in the wage-price spiral known as inflation.”
-Doris Kearns Goodwin - “Lyndon Johnson and the American Dream”
1. According to Goodwin, what mistakes were made in the 1960s that still impact the economy today?
“Johnson had not plunged into Vietnam out of madness or hunger for war. It may be obvious today that defending the South was not essential to protect Southeast Asia from Communism and avoid losing the Cold War, but that was by no means clear in 1963. Johnson knew that the postwar order depended on America’s willingness to use its armed forces to fulfill its treaty obligations and worried that if he ignored its SEATO pledge to South Vietnam, other Third World countries might side with the seemingly more steadfast Soviet Union. Affected by the high-pressure, self-certain advice of McNamara, Johnson believed he had inherited a commitment from Kennedy, who had publicly vouched for the domino theory and left military advisers in South Vietnam. As Johnson’s defenders argued, America’s years of holding the North Vietnamese at bay may have granted over Southeast Asian nations times and breathing space to strengthen their own democracies.”
-Michael Beschloss - “Presidents of War, The Epic Story, From 1807 to Modern Times” - page 576
1. According to Beschloss, what could be seen by some as a positive outcome of US involvement in Vietnam?
-Doris Kearns Goodwin - “Lyndon Johnson and the American Dream”
1. According to Goodwin, what mistakes were made in the 1960s that still impact the economy today?
“Johnson had not plunged into Vietnam out of madness or hunger for war. It may be obvious today that defending the South was not essential to protect Southeast Asia from Communism and avoid losing the Cold War, but that was by no means clear in 1963. Johnson knew that the postwar order depended on America’s willingness to use its armed forces to fulfill its treaty obligations and worried that if he ignored its SEATO pledge to South Vietnam, other Third World countries might side with the seemingly more steadfast Soviet Union. Affected by the high-pressure, self-certain advice of McNamara, Johnson believed he had inherited a commitment from Kennedy, who had publicly vouched for the domino theory and left military advisers in South Vietnam. As Johnson’s defenders argued, America’s years of holding the North Vietnamese at bay may have granted over Southeast Asian nations times and breathing space to strengthen their own democracies.”
-Michael Beschloss - “Presidents of War, The Epic Story, From 1807 to Modern Times” - page 576
1. According to Beschloss, what could be seen by some as a positive outcome of US involvement in Vietnam?