Rose and BilesWritten by Mark H. Rose and Roger Biles, editors of The President and American Capitalism since 1945.

 

On September 11, 2001, Al-Qaeda terrorists flew hijacked commercial jets into the Pentagon and World Trade Center towers. Approximately 3,000 Americans perished in that day’s attacks. Only weeks later, on September 27, President George W. Bush spoke to airline workers and to his fellow citizens at Chicago’s O’Hare International Airport. Bush exhorted Americans still in shock from the recent horrors not to hunker down in fear but instead to keep their business commitments and make time for leisure. He urged families to visit one of the nation’s many inviting vacation spots such as Walt Disney World in Orlando, Florida.

Bush’s urging to take a holiday appears at odds with the risks and sacrifices of American soldiers and pilots on their way to war in Afghanistan. But in contemporary America, presidents no longer ask civilians to sacrifice comfort and luxury in wartime. President Bush instead wanted Americans to travel, continue to buy autos and houses, and max out credit cards at the mall.  Bush had taken on a role described in our book by historian Brian Balogh as the “consumer-in-chief.”

Bush

At least since 1945, each president has taken his turn as consumer-in-chief. In that role, presidents sought to foster prosperity. In February 1955, for example, Dwight D. Eisenhower met with members of the Senate and House public works committees. Never before, one senator reported, had the president called all members of a committee to the White House to discuss domestic legislation. Eisenhower urged committee members to support legislation to accelerate construction of the Interstate Highway System. A ten-year road program, he told them, was “vitally essential for national defense” and would “help the steel and auto spare parts industry.”

Vice President Richard M. Nixon wanted to sell American products and showcase American lifestyles. In 1959, debating with Soviet Premier Nikita Khrushchev in front of a mock kitchen display at the American National Exhibit in Moscow, Nixon stressed the superiority of American-built refrigerators and new color TV sets. His celebration of domestic material comfort probably won widespread recognition among employed (mostly white) Americans residing in newly constructed suburbs. Nixon’s remarks were a paean to American-style, consumer capitalism, which he hoped to direct after the 1960 presidential election.

Nixon did not win election until 1968, but he maintained his steadfast interest in promoting economic growth across the decades. By the early 1970s, rising inflation and unemployment frightened Americans still lucky enough to have a job. Nixon sought remedies to change the way markets were organized. In 1970, he appointed leading bankers to a commission with the goal of eliminating a Federal Reserve cap on interest rates and creating rules to permit S&Ls and banks to conduct business outside state and local boundaries. That same year, eight railroads entered bankruptcy, including the venerable Pennsylvania Railroad. Nixon supported legislation to reduce the many rules that governed railroading as well as trucking. Lower shipping rates and expanded bank services were supposed to aid consumers and small savers. Members of Congress, as well as regulators and enraged bankers and truckers, managed to derail most of Nixon’s deregulation ideas. Still, an ailing economy kept Nixon’s ideas about how rule changes would foster economic growth and more buying in front of lawmakers and ordinary Americans during the coming years.

Presidents Nixon, Carter, and Reagan also presided over massive shifts in the economy of urban America. Under federal and local programs, including highway building, mortgage interest deductions, and stiff zoning laws, white middle income Americans moved to segregated suburbs; and in turn, populations in the formerly-great industrial cities like Pittsburgh and St. Louis shrank by as much as 50 percent between 1950 and 2000. To worsen matters, presidents as consumers-in-chief permitted Americans to import ever-more automobiles and steel. Consumer prices remained low as domestic factories shut down.

Presidents also took a direct hand in promoting American products. During the 1980s and 1990s, for example, biotechnology and genetic engineering opened the possibility of producing more food. Presidents Bush and Carter surely wanted to boost farm output. Historian Bartow Elmore says in our book, however, that they also wanted “to keep American businesses competitive in a world filled with hungry capitalist competitors.”

Postwar presidents in both parties shouldered two discrete yet closely related obligations: promoting the economic good and praising the virtues of American-style capitalism to a global audience. Closer study also reminds us that the idea of any president constantly denouncing government intervention in the economy is mostly bunk. Rare were the lawmakers consistently committed to eliminating the federal government’s formidable role in creating and supervising markets, whether in banking, railroads, stoves, automobiles, or genetically modified seeds.

Closer-Study

In partial fashion, President Donald Trump adheres to his predecessors’ ideas about the president as consumer-in-chief. Persuaded by the billionaire’s claims of financial wizardry, many of his supporters believed that his self-proclaimed business acumen would translate into more effective management of the national economy. His tough talk on trade and promise to bring jobs back to places like Central Michigan, vast swaths of Ohio, and West Virginia coal country resonated with an anxious blue-collar electorate faced with uncertain employment, low wages, and the loss of prestige long associated with hard work in the nation’s manufacturing plants. To make all his promises work, it seems, Trump will have to persuade manufacturers to maintain high-cost plants in the United States; and he will also have to stop manufacturers from installing labor-saving machinery. Not even presidents possess that level of authority.

But Trump, who was and remained uninformed on economic topics, never developed a coherent and nuanced trade policy. In January 2017, the mercurial Trump withdrew the United States from the Trans-Pacific Partnership (TPP). In April 2018, he announced a willingness to rejoin the TPP, provided leaders of other nations offered an improved deal—an unlikely event. Farm group leaders in particular feared the loss of pork sales to China. Trump at the same time threatened to conclude U.S. participation in the North American Free Trade Agreement, a turn of events—were it to occur—that would certainly disrupt complex supply chains among automobile manufacturers. Still more, Trump imposed tariffs on steel and aluminum imports, perhaps threatening a trade war certain to prove costly for American consumers and workers.

Earlier presidents had supported such international agreements that were supposed to help American firms sell more goods and services overseas and reduce consumer costs—but would also no doubt have led to lost jobs in the United States. Trump’s ability to shape such programs and deliver on his bold promises will go far in determining his presidency’s success. As Trump observed in 1987, he will be “measured not by how much . . . [he undertook] but by what . . . [he] finally [accomplished].”


Mark H. Rose is professor of history at Florida Atlantic University. Roger Biles is professor of history emeritus at Illinois State University. Together, they are the editors of The President and American Capitalism since 1945.

Contributors to The President and American Capitalism since 1945: Brian Balogh | Roger Biles | Margaret O’Mara | Mark R. Wilson | Iwan Morgan | Brent Cebul | Elizabeth Tandy Shermer | Pamela Walker Laird | Allison Elias | Sean H. Vanatta | Andrew Meade McGee | Paula Gajewski | Tracy Neumann | Daniel Amsterdam | Gavin Benke | Bartow Elmore

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