You make a couple of salient points that we can actually agree on… the solution however might be elusive as we see the world in quite different ways.
I am glad that you acknowledge the ‘war economy’ mentality that has grown up within US institutions going back to WWI. It was in fact Wilson who created the war economy culture of federal control over both economic and social structures in the US… up to and including beating people who disagreed with him. You and I will no doubt disagree on the definition of a ‘war economy’ or exactly what constitutes its nature and implementation. Shrug.
The ‘war economy’ was in fact the methods used by Wilson to exact federal control over not only the nature of commerce and war production in the US but the social order as well. When the war ended Wilson attempted to keep many of his policies in place and received much pushback against his steadfast belief in the living constitution in which originalism played no part in his ability to wield executive power.
What occurred after that and the imbalalances that lead to the great depression are still argued but lingering effects of Wilsons almost total control over the economy is quite suspect as a mitigating set of policies .
FDR emulated Wilson after his failed attempt to resurrect the economy with his New Deal policies. This is one thing I find most interesting about the conversation around what ended the depression. Some people of course will point to the New Deal even though unemployment up to 1940 never dropped into single digits and of course some will point to the war. The theory goes that the war spurred factory production, raised employment etc etc… If course FDR understood the fallacy between the need for a perpetual war machine and the stated objective of institutions like the failed League of Nations in advocating world peace… and of course the crushing debt accumulated to finance the war, but at the end of the war he and his people were terrified of double digit unemployment and that the war had only postponed the issue of recovery.
Because of the war need, most of the New Deal policies were rolled back but he saw the need to reinstitute the second bill of rights. FDR died but Truman was right there to pick up the spending programs of his predecessor. Problem was… he didn’t have any New Deal success to point to and objections to it by a majority of congress, scuttled most of those plans…
As Robert Taft said of why he voted against those policies “The problem now is to get production and employment. If we can get production, prices will come down by themselves to the lowest point justified by increased costs. If we hold prices at a point where no one can make a profit, there will be no expansion of existing industry and no new industry in that field.”Of course these are free market concepts that escape most in the discussion of prosperity and wealth creation.
Robert Wason, president of the National Association of Manufacturers, simply said, “The problem of our domestic economy is the recovery of our freedom.”
These ‘freedoms’ had been under constant assault since Wilson… Again, society pushed back against over zealot federal meddling… congress cut taxes and the economy recovered in rather grand fashion. Even with the tax cuts in 1946 they were still at 86% and were the only cut since the 1920’s.
As Sears, Roebuck and Company Chairman Robert E. Wood observed, after the war “we were warned by private sources that a serious recession was impending. . . . I have never believed that any depression was in store for us.”
With freer markets, balanced budgets, and lower taxes, Wood was right. Unemployment was only 3.9 percent in 1946, and it remained at roughly that level during most of the next decade. The Great Depression was over. The economy didn’t collapse after the war because checked spending, fiscal discipline and a tax policy encouraged entrepreneurship.
Of course some in the US never quite got over the idea that WWII ended the depression… and of course many others still don’t believe that high taxes and New Deal policies killed any hope of a recovery before the war.
By the end of the Truman administration the ‘war economy’ was well and truly ingrained… it was in fact a major nemesis of Eisenhower… Eisenhower was in fact a pragmatist when it came to fiscal responsibility and the war debt, while he wanted to cut taxes he said that it was a necessity to maintain tight spending by the government and high taxes until federal debt was dispensed with.
Of course liberals took that his lack of cutting taxes was a republican endorsement of high taxes, what he actually said was: “ What I have said is, reduction of taxes is a very necessary objective of government–that if our form of economy is to endure, we must not forget private incentives and initiative and the production that comes from it. Therefore, the objective of tax reduction is an absolutely essential one, and must be attained in its proper order.”
Unfortunately the mystique of JFK changed all of that…
Kennedy after all was the first president to actually cut taxes in an effort to restore his popularity after he picked a fight with US steel which saw the beginning of the end of Steel production in the US…
LBJ of course had other ideas and he leveraged Kennedy’s after assassination popularity to his own agenda… After all… How many times have you heard some politician say…”I want to be just like JFK … how many times, if any, have you ever heard someone say “I want to be just like LBJ”?
And onwards and upwards with the Great Society and the Vietnam War… and we have, either socially or economically been at war every since… Any attempt to kill the MIC or the central bankers they sleep with died with Eisenhower’s admonishments.
Just a brief history of the creation and attachment to the ‘war economy’ and the people who created it and perpetuate it… IMHO