Tag Archives: Kennedy

Ike And Tax Rates, Regulation Review

Some of the bickering about the financial quagmire we are in at the moment reminds me of watching a movie we’ve seen before.  We know the climax to this one.  To regulate and tax more or maintain more or less the status quo on regulation and tax less are the opposing camps in broad strokes.   When the topic of raising taxes arises the Dems so often talk about fairness and make a big issue of the 91% tax rate “under Ike” during the fifties. Then they claim that things did pretty well during that period.   I saw that movie in real time, I don’t have to go to Youtube to watch a rerun. 

They act like that tax rate was something that Ike imposed, promoted or campaigned on.  Wrong.  Just the opposite.  This was a Democratic tax rate.  The Dems had been in complete charge of all branches of government for decades by the fifties.  They are the ones who had raised taxes to that level, not Ike.  He opposed those rates and indeed proposed lowering tax rates.  He had the House in Republican hands for only two years of his eight in office and the Senate was firmly in the grip of the Dems.   That tax rate was also something of an illusion for the most part.  If you think the lobbyists and lobbying are bad now you should have seen in then.   The tax code at that time was littered with hundreds of special exemptions, deductions and exclusions so that people didn’t have to pay the confiscatory 91% rate.  No one paid that rate, and no one really expected anyone to pay that except for the mentally challenged.   You think the Kennedys paid that rate during that time?  Guess again.  The special interest groups got those deductions by, you got it, donating money to Democratic politicians in Washington.   The rich created charities that they endowed with large sums which was fully deductible and then put themselves and their family members on the boards at a salary of course and just as importantly the charities could fly them around the world and put them up at swanky places all at the expense of the charity.  They also created trusts for large sums of money which paid at a different rate and often held the equities they bought for a very long time to avoid paying taxes.  People are clever and simply will not and did not then pay the confiscatory rate of 91%.  Cars, vacations, fancy meals, employees were paid by others to avoid having to take income and then pay for them by taxpayers.

The airlines and transportation industry was regulated to the hilt during this period.   The ICC, interstate commerce commission established tariffs and told them what they could and could not charge for their services whether to individual consumers or industry.  The prices were high.  Relative to today it cost a fortune to fly from say Dallas to New York.  Likewise it was very expensive to ship a load of typewriters from Buffalo to Kansas City because competition was restricted do the level of regulation.  It lead to terrible results where those who had lobbied hard with  politicians and the ICC had received their “ticket” it was call, that is a permit to transport people or goods would oppose every new application submitted to the ICC.  You had to show to a bunch of bureaucrats that your new company and service was in the best interest of the public good.   Bureaucrats made these important decisions not the market place.  If another entity already provided trucking in the area you wished to serve you had to essentially prove they couldn’t handle all the business there.  How stupid was that.  The only standard should have been can you operate your new business safely and then let market competition decide who offered the best service to the public.  Remember that even if you could offer the same service for a lower price that was absolutely no guarantee that you would get your permit, indeed it was more often than not viewed as a negative because you were encroaching on the domain of the regulators who set the prices and thus your idea was an affront to their abilities and decisions.   There was no free market, it was a market of government.  The costs were high, the service fair at best and you sure couldn’t threaten to take your business elsewhere, there was no “elsewhere” thanks to the bureaucrats and the regulation.

Those are only a very few of the examples of the regulation overkill we lived under and managed to survive.  It thwarted economic growth and lead to the stagnation of the ’70’s which Reagan rebelled against at long last.  Those regulatory walls came tumbling down and now you can fly from Dallas to New York for much much less than it cost 35 years ago, considering inflation it is really low.   If you think the regulators and the regulated on Wall Street work against you now wait until we get even more regulation.   That will stifle competition and competition is what stokes the engines of commerce and makes for a fairer playing field for all of us.   Please read the current financial regulatory bill or as much as you can stomach.  It is a candy store for the bureaucrats and special interest groups and again will place too much power in Washington.  Why do they need 500 million for that new agency to glean “data” from banks, credit unions and credit card companies about your personal account?  It doesn’t say that explicitly but they can gather data and there is no limit on what it can be, it will include your personal data if those technocrats want it and they will otherwise how to they justify themselves and spend that 500 million.  Why all of a sudden do the Feds have authority over corporate laws?  The new shareholder provisions to empower the Greens and anti-globalists are an intrusion in the powers of the States to regulate corporations chartered in their States.  That is no authorized under the commerce clause and is prohibited under the Tenth Amendment.   Read and learn then make up your mind.   Those who love a big, very powerful Federal government don’t need to because their minds are made up and they like that, everyone with qualms about the size of the Federals will take caution.

As a side note, at the end of Ike’s last term there was a mild recession.  Kennedy defeated Nixon primarily on the economy and the so-called “missile gap” between the US and the Soviets.  Kennedy then proceeded to lower the tax rates and didn’t change our missile strategy because in fact there was no “gap” which he knew from his briefings during the campaign but continued to shout about.  Nixon couldn’t talk about our true missile strength because it would have jeopardized our security.   http://www.olcranky.wordpress.com

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Where Were You When_____

There are some events in history that are high water marks and even those who don’t normally pay any attention to current events much less history can recall where they were and what they were doing when the event occurred.  The most recent example of that would be 9/11 of course.  Most of us can recall where we were that day and what we were doing.  Those of an older generation can sure tell you about how, when and where they heard about Pearl Harbor.  I recall my dad saying he had never heard specifically of Pearl Harbor.  He obviously knew of the Hawaiian Islands and was aware that we had a base there but didn’t know its name.  He did know it was Sunday and that he and my mom were together and planning to go roller skating when they overheard someone talk about the attack.  (Yeah, I know a much simpler time)  They went to a neighbor’s to listen to the news.  They got married a month later and 9 months later Dad was off to the war.  Recall that the Great Depression was still in full force at that time and most folks were still worried about the next paycheck  more than they were about world events in far away places.    They listened to Edward R. Morrow on the radio and saw the papers talking about the War that had already been under way for two years but food on the table was a more immediate concern.  Don’t believe the current pundits who assert Roosevelt had fixed the Great Depression, ask someone you know who lived through it.

Many also recall where they were the day Kennedy was shot.  I do.  I was in school at SMU.  The wife and I had only been married for a little over a year at the time.  She was still working full time for LTV, then a defense contractor on its way to becoming a large conglomerate and she was attending school part time.  I was just the opposite, I was attending school full time and working part time.  My part time job was both great and a pain.  I drove a school bus for Dallas County to transport children with hearing and speech disabilities to a special school supported by the County.  It was a small bus, more like a van, and I hauled about 10 kids each day to and from school.  I would pick them up at their home or apartment and then return them in the afternoon.  I had to leave very early because the each trip was about 60 miles and it took a long time  because they were widely spread out over the county.  I totaled 120 miles every day and so did those poor kids.   Then I would reverse it in the afternoon and take them all right back to their doorstep.  Naturally there was lots of traffic because of the morning rush hour and then the start of the afternoon rush hour.  I had them to school by about 8:00 each morning and picked them up at 3:30.  That allowed me to attend my classes during the day so it was a great job from that standpoint.  We needed the money and the kids were mostly fun.  They ran the gamut from total loss of hearing and being mute to those with terrible impediments in their speech but they could talk and be understood if you listened carefully and got used to their speech patterns.  I learned to sign with them.  Not very well and I have forgotten almost every bit of it over the years. 

I had made my usual trip that November morning delivering the kids and was on campus for classes. I had a noon class. I recall going to the class and we were just getting settled when someone stuck their head in the door and said that the Governor and Kennedy had been shot.  That caused a bit of a stir and assorted comments of disbelief and a little  dismay by some.  The class was Abnormal Psychology and the professor who taught us, and I am not making this up, was Dr. Strange.   Within  moments he was giving a lecture about the type of personality that would be an assassin.  I mean he was getting into and writing terms on the board and the whole nine yards.  But during his lecture other people kept sticking their heads into the classroom and  giving updates on the news from radio or TV.  He finally got it that no one was really paying that much attention.  Everyone was more interested in the news than they were in his lecture.  He dismissed us rather reluctantly and we all went down to some other room that had a radio and listened to the newscasts.  I will admit that I was not a fan of Kennedy at all.  I didn’t like him and didn ‘t trust him.  I was angry and upset that the event would make him a martyr which is exactly what happened.  Even worse was the idea of Johnson being President.  If you care to go back and look at the news accounts of the day you will find that lots of people shared my opinion of him.  The election coming up the next year was already projected to be as close as the one he won.  He won that one by a whisker and only because of the voter fraud in Cook County Illinois.   He was not universally loved.  We were mostly concerned if there was some Soviet conspiracy involved.  Before the day was out Oswald had been arrested and immediately it was known that he was a Marine defector who had spent time in Russia and married a Russian wife.  The Bay of Pigs fiasco was still fresh in everyone’s memory and so naturally thoughts of Cuban involvement were rife. 

I still had to get the kids that day and take them safely home.  The route we took was right through the heart of downtown where the assassination had taken place.  The traffic was already terrible with the curious and onlookers.  I and the kids were caught up in that mess.  We were much later getting home that day than normal but we made it.  They were all asking a million questions and I had a busy time trying to manouever that van and keep them entertained on that long ride home.

A  comment on the lack of integrity and accuracy in the media of that day.  The schools let out early that day in Dallas due to the shooting.  In many of the schools the kids were intentionally not told why they were being dismissed early but only that they were.  Of course being kids a lot of them let out a cheer and a whoop.  They were getting a free holiday from school.  The national media reported it as the kids in Dallas cheering  the assassination and death of Kennedy.  The correct version was issued by the school district right away after the story broke of the cheering but very few of the media ever made a retraction or correction.   They let the story stand and the impression it gave even though they knew it to be false.

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Filed under Culture, family, history