The True Dangers of Trump’s Economic Plans
His Radical Agenda Would Wreak Havoc on American Businesses, Workers, and Consumers
LATE in the summer, in the heat of Washington and the presidential campaign, the Research Division of the Republican National Committee produced a tart little document entitled: "Democratic Duplicity and Appeasement in Foreign Policy Administration, 1935-1947." This was a compilation of carefully selected statements by the book-writing New Dealers, all designed to suggest that Roosevelt and Truman were clumsy appeasers who, by their mistakes, were more or less responsible for the melancholy state of world affairs today. If one were to read this or listen to some of the lower-case campaign speeches culled from it, one might conclude that the Republicans, if elected, would reverse Democratic policy on practically every front. The truth of the matter is, however, that on almost every basic foreign policy issue likely to come before the 81st Congress next January the chances of a continuation of the present policy are pretty good.
Four fundamental questions are likely to arise early in the new Administration, and these will undoubtedly determine the course of American foreign policy throughout 1949. These questions are:
Will the Congress approve an executive agreement (or will the Senate ratify a treaty) associating the United States with a Western European defense pact under the United Nations?
Will the Congress approve an extension of the European Recovery Program at approximately the same rate of expenditure and under more or less the same administrative establishment as prevail at present?
Will the Congress approve new legislation to increase the rearmament of the United States and, particularly, to authorize the President to transfer arms to other countries?
Will the Congress, and particularly the House of Representatives, accept American participation in the International Trade Organization and carry on the Reciprocal Trade Agreements program of past Democratic administrations?
These are not the only questions that will be waiting for the legislators when they finish their political fun and games this autumn, but these four will probably decide the trend of American policy at the mid-point of the century. The background and prospects of each are therefore worth exploring.
1. Will there be a political security arrangement between the United States and Western Europe?
Last spring, in the closing weeks of the Congressional debate on the European Recovery Program, many persons in Washington recognized that the economic recovery of Europe and the military security of Western Europe were inseparable. It is a political maxim among American cabinet officers that the Congress will deal with only one major foreign policy question at a time, and for that reason the ERP was pushed ahead on its own. But the more the ERP was debated, the more people recognized, even on Capitol Hill, that unless the fear of aggression were removed in Western Europe, economic recovery could not be achieved and progress toward an effective international mutual aid economy in Western Europe would be slow.
For example, when American officials began discussing specific economic recovery projects with European governments under the ERP they immediately ran into questions which were not primarily economic but political and military. So long as there was fear of war, insufficient European capital would venture to revitalize necessary industries. So long as fear existed, nations hesitated to build roads that might be used as paths of invasion. So long as the atmosphere was tense, men and money, badly needed for recovery projects, had to be diverted to military requirements. The whole ERP objective of a self-sufficient, cooperative Western European economy was consequently hampered.
As soon as the ERP was passed on Capitol Hill, therefore, Senator Arthur H. Vandenberg, Chairman of the Senate Foreign Relations Committee, and Under Secretary of State Robert Lovett began discussing how to supplement the ERP with a similiar program of military and political coöperation between the United States and Western Europe. The result of this was the adoption by the Senate of the so-called Vandenberg Resolution which supported, in general terms, the principle of American participation in a group security arrangement with other nations. The problem of security and the means of dealing with it were well defined and outlined in the Senate Foreign Relations Committee's report on the Vandenberg Resolution. That report included, among other things, the following significant remarks:
The Committee believes that association of the United States with regional or other collective arrangements as affect its national security will help protect this country and help prevent war. The great power of the United States must be thrown into the scales on the side of peace. . . . The committee considers the principle of self-help and mutual aid followed in the European Recovery Program equally applicable in the field of security. . . . The Committee is convinced that the horrors of another world war can be avoided with certainty only by preventing war from starting. The experience of World War I and World War II suggest that the best deterrent to aggression is the certainty that immediate and effective counter-measures will be taken against those who violate the peace. . . .
From this language it was assumed in some quarters that the Foreign Relations Committee was supporting an important and, for the United States, revolutionary principle. The Committee was believed to be saying, in effect: "The best way to deal with the insecurity of Europe, the fear of aggression by the Red Army, is to make clear in advance that if that army violates the peace, it will be confronted by the military might of the United States. . . . And the way to make that clear to the Russians is for the United States to join with other nations in a mutual defense arrangement under Article 51 of the U.N. Charter."
Though the Senate debated the Vandenberg Resolution and passed it with only four dissenting votes, it would be misleading to assume that the Senate was consciously accepting all the commitments that may be suggested by some of the language of the Foreign Relations Committee's report. The debate was perfunctory to say the least. It was conducted in the closing days of the spring session of Congress, just before the Philadelphia presidential nominating conventions. Senator Vandenberg himself emphasized that adoption of his resolution was in no way a commitment, but was merely an expression of the "sense of the Senate." Before anything effective was done to implement the ideas behind his resolution, he said, the Europeans themselves would have to devise a self-help and mutual aid security plan, and negotiate it with the executive branch of the government, which would then, in turn, bring it back to Capitol Hill for study and Congressional approval.
It was on this assurance that a harassed Congress, eager to get away to the scene of the presidential conventions, passed the Vandenberg Resolution. It is true that the Senate did say that "the power and influence of the United States must be thrown into the scales on the side of peace," but it did not actually throw that power in and it did not take any specific commitment to do so. It conceded that the best deterrent to aggression was the certainty that immediate and effective countermeasures would be taken against aggressors, but it did not provide that certainty of immediate and effective countermeasures.
All that can safely be said, therefore, is that a Republican-dominated United States Senate has shown that it is aware of the need of American power to bolster the security of Western Europe, and thinks it sees, through an expansion of the regional arrangement plan -- first defined by the Editor of this magazine -- a way to deal effectively with it. The question now is what the new American administration will do when the Congress reassembles next year.
It is known that both President Truman and Governor Thomas E. Dewey, the Republican presidential candidate, approve the objectives of the Vandenberg Resolution. There is also reason to believe that John Foster Dulles, who is likely to be Secretary of State in a Dewey administration, favors the association of the United States with a Western European regional security pact for a limited period of time; but just when such a proposal will be presented in specific terms to the Congress will undoubtedly be determined by events between now and next February.
One of the Republican arguments in recent weeks has been that, if elected, Mr. Dewey will be in a position to make a fresh start in the negotiations with the Russians. Presumably, therefore, the Republicans would not attempt to push through Congress at once a defense pact which is opposed so violently by the Soviet Union. If, however, there is no sign of a change in Soviet policy, and if continued attempts at reconciliation fail, there is little doubt that a Republican administration would proceed with some kind of mutual defense pact. It probably would not go beyond the commitment taken by the United States under the inter-American defense system, but it undoubtedly would go that far; and the general feeling in Washington is that a Republican executive would get the support of the Congress, particularly in 1949 when the unity of the Party and the power of patronage are likely to be strong.
2. Will Congress increase the pace of American rearmament and give the President authority to transfer arms to other countries?
The general feeling in Washington is that, unless there is a radical change in Soviet policy, the Congress will answer the above questions "Yes." On the assumptions -- both widely accepted in Washington -- that Soviet policy will remain about the same, and that Mr. Dewey will be elected, there is little doubt that the new Administration will base its policy on a strong military and naval establishment, working actively with the Western European nations.
It is not common, even for the economy wing of the Republican Party, to argue in favor of economy at the price of national security. It is not likely, either, that any new Administration will be eager to start off, after 16 years in opposition, by increasing the size of the manpower draft into the armed services. Early in 1949, therefore, the new Administration is likely to be confronted with alternatives that are similar to those that faced President Roosevelt late in 1940 and early in 1941. It will have to decide whether it is in the best interests of the United States to raise a large military establishment with a large standing army or to supplement a modern but moderate army with allies supplied with American equipment. This is, in effect, the old lend-lease question on a smaller scale, and unpopular as that question is among Republicans, the leaders of the Party concede that it will have to be faced in one form or another. Either the arms will have to be manufactured and placed in the hands of a large American army, or they will have to be manufactured here and divided between a smaller American army and our allies overseas.
This question came up in the most direct way last spring as soon as Mr. Vandenberg and Under Secretary of State Lovett moved from the general discussion of security to the specific problem of implementing the Vandenberg Resolution. It was not solved then for practical reasons: first, there was no balanced supply of arms to send abroad; second, there was no joint Western European plan of defense; third, the President had no authority to transfer to other countries arms needed here by the American Army; and fourth, it was an election year.
Since then, a limited draft has been passed and new appropriations for the military establishment have increased the pace of the nation's rearmament. Also, military and political conversations have been started both in Washington and London on the self-help and mutual aid defense programs necessary for the protection of the western world. By the turn of the year, these programs will be ready for study by the new Administration.
If by that time the world situation is about the same as today, there seems little doubt that the President, whoever he is, will seek -- and get -- authority to transfer arms to those nations whose security is held to be essential to the defense of the United States. The President will not have that authority when he comes to power. He will have the right, as he now has, to transfer "surplus property" to other nations, but there is very little surplus property available, certainly not enough to bolster materially the weak nations west of the Oder.
3. Will the European Recovery Program be extended for another year at approximately the same rate of expenditure?
The answer to this question by leading Republicans and Democrats alike is again in the affirmative. Both parties are committed to the continuation of the ERP principle in their party platforms. The nation's policy in Western Europe is based on it, and in view of the Soviet Union's violent opposition to the program, few members of the major parties in Congress are willing to abandon the Western European nations to placate Moscow. If there is a new Republican Administration, the general feeling in the capital is that the chances of carrying through the program at the present rate of expenditure will be enhanced. That Administration will be under the most careful scrutiny both at home and abroad. Governor Dewey is on record as supporting the program, and is not likely to start off by crippling a program that is widely supported by the electorate.
Also, it is felt that Mr. Dewey will certainly get far more cooperation from Chairman John Taber of the House Appropriations Committee than any Democratic president could hope to get. Mr. Taber was among Mr. Dewey's strongest supporters in the fight for the Republican presidential nomination. He is known to respect Mr. Dewey's administrative ability and his sense of economy. In the fight over the first appropriation for the ERP, Mr. Dewey quietly interceded with Mr. Taber to accept the compromise that was acceptable to Senator Vandenberg and the Senate, and there is reason to believe that, if anyone can persuade Mr. Taber to take a broader view of the objectives of the ERP, Mr. Dewey is the man who can do it. Indeed, this relationship between Mr. Dewey and Mr. Taber is regarded by many persons in Washington as one of the strongest arguments for a Dewey administration. The New York Governor has had occasion to help Mr. Taber politically in the past. By all public statements, Mr. Dewey is far more enthusiastic about the ERP than Mr. Taber, but while Mr. Taber is extremely jealous of his rights and independence as Chairman of the Appropriations Committee, there is reason for believing that he will listen sympathetically to Mr. Dewey's arguments, if the latter is president when the renewal of the ERP goes to Capitol Hill.
There is, however, more than one Dewey in this picture. When the ERP was passed, a committee of Congress -- the Joint Committee of Foreign Economic Coöperation, the so-called ERP "watchdog" committee -- was established to supervise the operation of the act. The acting head of that committee is Charles S. Dewey, former banker, real estate operator, and Congressman from the Ninth Congressional District in Chicago. Mr. Dewey calls himself agent-general of the watchdog committee and has been in Europe most of the summer checking on the progress being made under the act. Much will depend on the report he brings back and presents to his committee and to the Congress. If he finds that the administration of the act is good and that the recipient nations are making progress with their self-help and mutual aid programs, his testimony will assist those who wish to continue the act into its second year. If he does not -- if his report sustains the arguments of his friend, Mr. Taber, who is also a member of the watchdog committee -- then the rate of expenditure in the second year may very well be reduced accordingly.
The record of the present administrators of the ERP under Paul Hoffman, and the record of the Marshall Plan nations by the end of the year, are also likely to have considerable effect on the size of the second year appropriations. In the first few months of his administration, Mr. Hoffman was well behind schedule in his ERP procurement program, and if he has not demonstrated by the end of the year that all the money appropriated was needed for useful and productive expenditure, that fact again will have important bearing on the second year appropriations.
But despite the prospect of victory by the Republicans, who in the past have been loud champions of private enterprise economics and rigid economy in overseas spending, it is not likely that they will start any serious movement to scuttle the ERP or make its recipients adopt Republican Party economics as a condition of continued aid. Governor Dewey has taken the position that the United States should not seek to impose our economic system on those receiving Marshall Plan aid, and he is likely to follow this line against any who might seek to reopen this question next year.
If, however, there are changes in the administration of the ERP in Washington and abroad, nobody will be very much surprised. It was the Republicans who insisted that the administration of the ERP be divorced from the Department of State and that Mr. Hoffman and his staff at the Economic Coöperation Administration be given a great deal of power and autonomy. If the Republicans are in power next January, the chances are that the State Department will regain some of the power the Republicans insisted it should not have. Then it will be their Secretary of State and their ambassadors dealing with the situation, and that, of course, in a political world, makes a difference.
4. Will the Congress extend the Reciprocal Trade Agreements Act and approve participation by the United States in the International Trade Organization?
The Trade Agreements Act, as amended by the 80th Congress, will remain on the books until June 30, 1949, and will undoubtedly be sent to the Congress for extension in April or May. The chances are that the question of United States participation in the ITO will be debated at the same time, and both are expected to be strongly opposed.
There is no basic issue in the realm of foreign policy on which there has been such a marked party split as over the Trade Agreements Act. This act was introduced in 1934 and has come before the Congress six times. With the single exception of 1943, when there was little normal trade between nations and the tendency was to follow the wartime leadership of President Roosevelt, a majority of Republicans have voted against the act in both houses. The record on this is instructive, for on the question of the tariff many influential Republicans differ fundamentally from Governor Dewey, who has consistently supported the bill. The Senate votes on the first five tests of the act were as follows:
1934 | Democrats: for, 51; against, 5 |
Republicans: for, 5; against, 28 | |
1937 | Democrats: for, 56; against, 9 |
Republicans: for, 0; against, 14 | |
1940 | Democrats: for, 41; against, 15 |
Republicans: for, 0; against, 20 | |
1943 | Democrats: for, 41; against, 8 |
Republicans: for, 18; against, 14 | |
1945 | Democrats: for, 38; against, 5 |
Republicans: for, 15; against, 16 |
In these same years, the record in the House of Representatives showed the same pattern:
1934 | Democrats: for, 269; against, 11 |
Republicans: for, 2; against, 99 | |
1937 | Democrats: for, 278; against, 11 |
Republicans: for, 3; against, 81 | |
1940 | Democrats: for, 212; against, 20 |
Republicans: for, 5; against, 146 | |
1943 | Democrats: for, 193; against, 3 |
Republicans: for, 163; against, 26 | |
1945 | Democrats: for, 205; against, 12 |
Republicans: for, 33; against, 140. |
These figures indicate how solid Republican opinion has been against the act ever since the beginning. They show that with the exception of the war year of 1943, the GOP consistently opposed the act; that on no occasion in a peacetime year has a majority of the Republicans in either house gone along with the Administration, and that the majorities against the bill have been almost unanimous.
The figures as they stand may well be misleading. The opposition to the program is certainly not now so great; indeed, there are undoubtedly a majority of Republican Senators who support it; and Senator Eugene D. Millikin of Colorado, the key figure on this question in the upper house, has himself changed considerably and is now at least in favor of the principle of the act. Nevertheless, 205 Republicans in the House last spring voted against a three-year extension of the act, requested by the President, and only 16 favored it. And while the House was finally persuaded by the Senate to accept a compromise bill extending the act for one year, 218 Republicans originally voted in the debate to give the Congress a veto power over any tariff changes that did not come within limits established by the United States Tariff Commission.
On this question, therefore, there is likely to be trouble. With memories of a generation of criticism of the Republican rôle in putting over the Smoot-Hawley tariff when they were last in power, Mr. Dewey and his colleagues in the Executive will undoubtedly attempt to demonstrate that the high-tariff tendencies of the modern Republican Party have been curbed and that the Trade Act and the ITO will go forward with Republican support.
This will take some doing, however, and much may depend on the parliamentary skill of those who have to deal with the problem next spring. The high-tariff bloc in the House will certainly argue that the ITO should be sent to Congress as a joint resolution for study by the Ways and Means Committee, which is generally regarded as being hostile to the proposition. The international trade section of the State Department will undoubtedly argue that, like the FAO and the International Maritime Consultative Organization, American participation should be sanctioned by treaty, ratified only by the Senate. Either way, however, these two pieces of legislation are likely to meet opposition which will not be easily removed even by a new administration in its honeymoon days.
Nevertheless, what is remarkable in looking forward to the possibility of a new Republican administration with safe majorities in both houses of Congress is that the question of the tariff is virtually the only major foreign policy issue of which it can be said: "Here is a point where the Republicans differ from the Democrats and where they may block, if not reverse, the trend of the past few years."
So far as the executive branch of the government is concerned, there is no fundamental foreign policy issue -- not even China, despite all Governor Dewey has said -- on which American policy is likely to be reversed by the advent of a Republican administration. Indeed, probably the most astonishing single fact in American political life today is that the leaders of the two major parties can agree on fundamental foreign policy questions more than on anything else. They cannot agree about housing, labor, prices, or the rôle of government at home, but they can at least agree fairly well on the use of American power and influence abroad.