My latest reading of Irwin Gellman's The Contender: Richard Nixon, The Congress Years, 1946-1952
focused on Congressman Richard Nixon's stance on the Marshall Plan, a
post-World War II attempt by the U.S. to provide monetary assistance to
help European nations in rebuilding their economies so that they
wouldn't fall prey to Communism. Nixon was a supporter of the Marshall
Plan, especially after he visited Europe, saw the poverty there, and
questioned Europeans about the popularity of Communism. Nixon differed
from a number of conservatives, who did not care for the Marshall Plan
because they felt that the foreign aid would contribute to inflation,
plus they were reluctant to support giving money to European governments
that they deemed to be socialistic.
Nixon also supported
"the Reciprocal Trade Agreements Act as another means to strengthen the
democracies" (page 149), and his reason was that he thought that more
imports would help the U.S. to pay off its debts. In short,
Nixon thought that the U.S. needed Europe, as Europe needed the U.S.!
Yet, Gellman notes, Nixon was protectionist when it came to his own
constituents, for Nixon voted against reducing tariffs "for the citrus
industry" after a "freeze...had severely damaged the crop" (page 149).
I
mentioned that there were opponents of the Marshall Plan who believed
that it was inflationary. Inflation was a significant issue during the
Truman years. Remember that Ronald Reagan gave a speech when he
campaigned for Truman and Hubert Humphrey in 1948 that criticized the
"Republican inflation that ate up all [a man's] savings" (see here)!
According to Gellman, although Nixon as President was notorious for his
wage and price controls, as congressman he was quite critical of
President Harry Truman's call for price controls, for Nixon feared that
such a policy would hinder productivity (which, I will note, was what
many opponents of price controls said during Nixon's Presidency!). To
help Americans meet rising costs, Nixon as congressman supported tax
breaks for the lower income, yet he preferred a more modest tax
reduction than what he actually voted for because he wanted to avoid an
"unbalanced budget" and the endangerment of "national security against
any potential foreign attack" (Gellman's words on page 150). President
Truman vetoed the Republican bill because he thought that it would
reduce revenue and contribute to inflation, but the Republican majority
in Congress, along with a number of Democrats, "overrode his veto" (page
150).
This stood out to me for a couple of reasons. First of
all, it was interesting that Republicans such as Nixon supported
exempting the lower-income from taxes, especially since in today's
political discourse it is often Republicans (not all, but certain
prominent ones) who lament that about half of Americans pay no federal
income taxes, while President Barack Obama champions tax cuts for the
middle class. Second, I wondered if the tax cuts could have
contributed to more inflation, for, if people have more money to spend
as a result of the tax cuts, and there is more demand, would not
companies raise prices?