The Abuse of Crisis
Dwight Eisenhower (right) warned against the kind of “constant change” that later characterized LBJ’s presidency
By Amity Shlaes
This essay appears in the Summer 2024 issue of the Coolidge Review. Request a free copy of a future print issue.
The essay is adapted from Amity Shlaes’s regular column “The Forgotten Book,” which she pens for “Capital Matters” as a fellow of National Review Institute.
Politics these days is the Duel of Crises. Each party competes to prove its crises the more urgent—and the more worthy of outlays.
Most of us date this crisis culture to 2008 and Rahm Emanuel’s line “You never want a serious crisis to go to waste.” In fact, hyping emergencies to win elections or to justify unprecedented spending has been the American game for more than a century now.
How depressingly tight the correlation can be emerges in Robert Higgs’s 1987 book, Crisis and Leviathan: Critical Episodes in the Growth of American Government.
Higgs offers a ratchet theory: “When crisis provoked an extension of governmental powers, the new powers in a fundamental sense never could be merely transitory.” Each crisis establishes a new normal, a higher base level from which lawmakers and the president simply build upward.
Fortunately, Higgs also shines light on those American leaders who managed to throw a wrench into the works, at least for a time.
Americans were now as domesticated as Merino sheep: they had the habit of accepting larger government.
RELISHING CRISIS
Higgs commences his account in the relative calm of the first part of the twentieth century, when the share of spending by all governments—federal, state, and local— represented 6 or 7 percent of the economy. After winning a second term on a commitment to keep us out of World War I, President Woodrow Wilson determined that America must indeed enter that war: the crisis was the peril to democracy around the world. To make the world “safe for democracy,” Wilson and Congress hiked spending to about 20 percent of gross national product, loading vast debt onto the then-narrow back of the federal government.
Since two great nondemocratic regimes were firmly in control in Germany and Russia within a decade and a half of the Armistice, the merits of Wilson’s project can be debated. In any case: afterward, U.S. government spending did drop—and stayed relatively low through the 1920s. But more about that later.
The second great crisis opportunity to present itself was the market crash of 1929. As Higgs notes, the history books paint the president at the time, Herbert Hoover, as Herbert “Do Nothing” Hoover. In reality, Hoover relished crisis. He had, after all, made his name leading a rescue in World War I, feeding starving Belgians behind enemy lines.
In 1929 Hoover was again all action: spending, raising tax rates, and maneuvering to manage everything from share prices to wage levels.
“‘Do nothing’ was never his motto,” comments Higgs. “His middle name was actually Clark.”
Ignoring Hoover’s frenzy, the Depression only deepened. Franklin Roosevelt exploited the downturn and launched the New Deal, upping spending by all levels of our government to a total of about 15 percent of the economy.
The next crisis, America’s entry into World War II, provided the occasion for raising spending (again, of all levels of American government, or what the internationals call “general government spending”) to 46 percent of the economy.
After V-E and V-J Days, our federal government and lawmakers cut back—but not all the way to the pre-Depression levels. They didn’t need to, since Americans were now as domesticated as Merino sheep: they had the habit of accepting larger government. Economist Herbert Stein, writing later, offered one of the saddest insights ever about business leaders. Businessmen, Stein said, “had learned to live with and accept most of the regulations [they] had strenuously opposed.” They protested at new incursions into their business, but they “regard the regulations they are used to as being freedom.”
GUNS AND BUTTER
Higgs’s next great ratchet moment comes with Lyndon Johnson, who in 1964, lacking an obvious traditional emergency, framed one: poverty. Poverty, of course, existed before Johnson but scarcely registered as a crisis, since most people thought, correctly, that poorer Americans were making gains.
The Johnson administration nonetheless chose to elevate poverty to the status of an official national emergency. It launched its War on Poverty as part of its much larger spending program, the Great Society.
Within a year or so, a second crisis became official: Vietnam. “Guns and butter” spending lifted outlays yet again. By the 1970s, civilian employment by federal, state, and local governments was half again as high as it had been in the 1950s.
The historico-caricaturists treat President Richard Nixon as they do Hoover, as an uncharitable free marketeer. The record suggests the opposite. Nixon, like Hoover, relished crises, international or domestic, and sought to win favor by expanding social-welfare programs at an even greater clip than Johnson. (See John Cogan’s heavily documented The High Cost of Good Intentions.) Nixon suggested that citizens who did not share his taste for perpetual alarm might somehow not be living up to their duties. “We have an energy crisis, but there is no crisis of the American spirit,” Nixon said in 1973.
Eisenhower made minimizing crisis the focus of his presidency from the beginning.
THE ANTI-CRISIS PRESIDENTS
The 1987 edition of Crisis and Leviathan offered scant hope for arresting the ratchets. In the intervening years, Higgs has grown only darker, telling a crowd in 2013 that “the state poses a mortal danger to all humanity.”
The rest of us, however, can find hope and perhaps a little utility in Higgs’s description of what can be called anti-crisis presidents.
The first was President Warren Harding, who deliberately chose as his 1920 campaign slogan a term so dull it was mocked by the literati from the get-go: “Normalcy.”
After “Normalcy” won in a landslide, Harding, in his inaugural address, plugged for dullness and tradition once again.
“No altered system will work a miracle,” Harding intoned. “Any wild experiment will only add to the confusion. Our best assurance lies in efficient administration of our proven system.”
First Harding, and then President Calvin Coolidge, squelched the new programs Congress put before them, though Congress occasionally overrode their vetoes.
For eight praiseworthy years, the pair managed to keep the federal government small and reduce the federal debt by more than a third. The price for this effort was trashing by snarks such as Sinclair Lewis or an ambivalent H. L. Mencken. Lewis dedicated a whole book, The Man Who Knew Coolidge, to mocking Coolidge as middlebrow. “There were no thrills while he reigned, but neither were there any headaches,” commented Mencken of Coolidge. “He had no ideas.”
But Harding and Coolidge were willing to pay the price. Only once, as far as I can tell, did Coolidge, who bore the brunt, weaken and snark back.
In a 1930 column on Lewis, Coolidge noted that as a result of such derided policies, “The world waits in our anteroom for our advice and assistance.” The literati didn’t matter. “The name Mr. Lewis gives us is unimportant. The records of our deeds will surpass all books.”
The other great anti-crisis president was Dwight Eisenhower. Most Americans know that on leaving office in 1961, Ike warned against the leviathan, which he called the “military-industrial complex.”
Less recalled is that Ike made minimizing crisis the focus of his presidency from the beginning. In his inaugural address he said that America could and should distinguish “between a thoughtfully calculated goal and spasmodic reaction to the stimulus of emergencies.”
The topic in that sentence was foreign intervention, and to the chagrin of the French after Dien Bien Phu or the British and French during the Suez Conflict, Eisenhower subsequently proved that he meant what he said.
Over the vehement protests of military brass, Ike hacked away at defense spending, thereby not only reducing the likelihood of nuclear disaster but also keeping the federal budget in check. Because defense spending represented a far greater share of that era’s federal budget than it does today, General Eisenhower proved just the right fellow for this job.
And he knew it, as biographer Evan Thomas reports: “God help the nation when it has a president who doesn’t know as much about the military as I do,” Ike said.
But Ike also suppressed crisis mongering over domestic matters, and he took care to explain why: mere action to defuse a crisis doesn’t often lead to solid reform. Preoccupied with battles over false crises, we fail to address the genuine one, which today happens to be the federal debt.
“Change based on principle is progress,” Ike reminded a crowd at the Cow Palace in 1956. “Constant change without principle becomes chaos.”
What a worthy line for just about any president.
Amity Shlaes chairs the Coolidge Foundation, is the author of Great Society, and is a fellow of National Review Institute. A version of this article first appeared in National Review’s “Capital Matters.”