Monday, January 14, 2013

The Contender: Richard Nixon, The Congress Years 7

My latest reading of Irwin Gellman's The Contender: Richard Nixon, The Congress Years, 1946-1952 focused on the Alger Hiss scandal.  I'll go more deeply into the Alger Hiss scandal in my post tomorrow, for my latest reading brings up things that are explained in more detail or resolved in my next reading.  My next post won't be exhaustive, mind you, but I'll talk a little bit about the people involved in the Hiss incident, and perhaps I'll provide you with links in case you want to study the topic further.  Since the Alger Hiss scandal was a significant part of Richard Nixon's political career, I'm sure that it will come up again in my readings and blog posts for my Year (or More) of Nixon!

In this post, I'll highlight two items from my latest reading.

1.  As I said in an earlier post, inflation was a significant issue during the time that Richard Nixon was a congressman, which was when Harry Truman was President.  On page 192, Gellman states: "Nixon argued that the president deplored high prices, yet he proposed government housing, higher minimum wages, federal health subsidies, federal aid to education, larger Social Security benefits, and more money for the United Nations.  These pieces of legislation had to fuel inflation."

I've talked about inflation a lot on my blog, particularly the topic of what policies contribute to it.  This issue came up during the 1980 Presidential election, which was a time of high inflation, as the candidates accused each other of supporting policies that would be inflationary.

It seems to me that one can make the case that right-wing and left-wing policies could both be inflationary.  Conservatives believe that more government spending is inflationary, for a variety of reasons: it increases demand, for the government is spending more as a customer; the government may choose to raise taxes to pay for its increased budget, and companies pass the cost of higher taxes onto their consumers; and the government prints money to pay for its programs and its debt, and printing more money results in inflation.  Others have argued, however, that tax cuts fuel inflation, for they increase demand because people now have more money in their pockets to spend.  A number of conservatives maintain that the way to get inflation under control is to tighten the money supply, and, while that has sometimes worked, I wonder if even that can result in higher prices: a tight money supply entails high interest rates, so if companies are borrowing money in order to invest, wouldn't they pass on the cost of the interest rates to their consumers?

Supply-siders have maintained that certain tax cuts can combat inflation, by removing hindrances on investment and productivity.  That makes a degree of sense, for productivity is a way to combat inflation, since it increases the supply of goods and allows it to keep up with the demand.  But I don't think that tax cuts for corporations always result in lower prices, for some corporations may choose not to produce because they like the profits that the high prices are bringing them.  Some argue that this is why the tax cuts for the oil companies under President George W. Bush did not result in lower gas prices.

2.  I'll give you a little preview of my post tomorrow on Alger Hiss.  Essentially, Elizabeth Bentley and Whittaker Chambers were ex-Communists who were accusing people who served in the Franklin Roosevelt Administration (maybe also the Truman Administration) of being involved in espionage for the Soviet Union.  Truman attacked the House Committee on Un-American Activities, claiming that the Republicans in Congress were merely trying to divert attention from their own failure to tackle inflation.  On page 204, Gellman states that Nixon did not understand what "stopped [Truman] from investigating the legitimate charges brought out by Bentley and Chambers."  Later in the book, Gellman speculates that the refusal of the Truman Administration and Republicans in Congress to cooperate on the subversion issue set the stage for Senator Joseph McCarthy.  But, getting back to page 204, Gellman states there, as he quotes Nixon: "'The cover-up,' much on Nixon's mind in the fall of 1972, 'is what hurts you.'"

Ironic, isn't it?  But I guess that it's easier to criticize people in power than it is to consistently do the right thing once one is in power, when that right thing is inconvenient.

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