When Larry Kudlow and I started researching our book (released last week), JFK and the Reagan Revolution: A Secret History of American Prosperity, we got a crucial lead from an archivist at the Lyndon B. Johnson Presidential Library. Allen Fisher told us that the big John F. Kennedy tax-rate-cut bill, signed into law by LBJ in February 1964, was intimately connected to the civil rights bill that Kennedy had introduced in 1963 and got passed, again via LBJ, in 1964.
Allen and a colleague had written about this matter before, yet it became clear that Kennedy’s two “big bills”—as commentators at the time referred to JFK’s tax-cut and civil rights proposals—had a common essence that historiography had passed over.
Kennedy revealed what this essence was, in one of the last speeches of his life, in November 1963: “No one gains from a full employment program if there is no employment to be had; no one gains from by being admitted to a lunch counter if he has no money to spend; no one gains from attending a better school if he doesn’t have a job after graduation.”
Slow economic growth, as JFK laid out in this and many speeches in support of his tax-rate-cut bill, meant that the civil rights revolution would probably never be accomplished. An insufficiency of jobs and wealth would make the white majority hunker down and make sure it got theirs—at the necessary expense of African Americans. Given good economic growth, however, the civil rights revolution stood to be realized. An abundance of jobs and income would prompt whites (in the main) to find it unnecessary to hoard jobs for themselves while welcoming African Americans into the workplace.
JFK knew that his marginal tax cut, with major rate cuts on high earners in particular, would free up so much capital for real-world investment that a doubling to a 5% rate of growth would result—exactly what happened, by the way, in the 1960s. And the cascade of new jobs by virtue of the growth would unlock the civil rights problem. Chicago Mayor Richard Daley represented this view, on the phone with LBJ six months after the tax cut passed in 1964, when the president had asked him if working-class whites were afraid that “the Negro” was going to take their jobs. Daley replied, “No, because fortunately, we…haven’t had too much unemployment…[W]e have been bringing into the skilled building trades Negro members, and this they appreciate very much….I really believe that when it comes to the actual vote the [average workers] will be concerned about the prosperity.”
There it was: prosperity brokered by a supply-side (as we would call it today) tax-rate cut would melt resistance to civil rights. The civil rights act of ’64 was not so much a “force bill” making white Americans welcome blacks into jobs and accommodations, as a blessing of conditions independently arrived at by the blooming of prosperity.
The disturbing part of the story concerns those who opposed Kennedy’s tax cut in 1963 and 1964. Not the minority Republicans unsure about prospective budget deficits, but far more important, in view of the bill’s legislative fate, the reflexive segregationists from the South.
The likes of Democrats Harry Byrd, Albert Gore Sr., Howard Smith, and James Eastland in Congress appeared to grasp all too well the point Kennedy was after. If JFK’s tax-rate cut passed and big-time prosperity ensued, the cause of segregation would lose functional allies, namely the labor unions and the Northern white working class that had been reserving jobs for whites in the slow-growth President Eisenhower years (we are apt to forget that there were three recessions from 1953-60 and a rather pitiful growth rate of 2.5%). Indeed, the enormously notable March on Washington of August 1963, that of Martin Luther King’s “I Have A Dream” speech, laid out the aims of both of JFK’s “big bills.” The event’s subtitle was “For Jobs and Freedom.”
