Crisis and Liberty: Lecture 9

The growth of government since WWII was along non-military lines. These years were crisis years from about 1963 to 1974. Turmoil, conflict and uncertainty were commonplace. Assassinations were numerous. Johnson and Nixon were presidents. The welfare state expanded.

The Civil Rights movement stirred sit-ins, protests, and challenges. Voter registration of blacks surged. This political action was new. Anti-Vietnam protests were part of most campuses especially after 1968 and in the Democratic Party. Hippies and anti-establishment long-haired young people dropped out of old respectability.

Other groups like environmentalism and feminism spilled over from the protest groups. The War on Poverty was a Johnson welfare policy. The Food Stamp program grew quickly. Head Start was tried in the schools. Medicare was created, bulging seven times beyond projections, even though socialized medicine had been rejected all along. Demand was unlimited and doctors gamed the system. The program is a gigantic boondoggle.

Consumer protection laws like Truth in Lending and Product Safety Act had the effect of reducing innovation and raising costs. Environmental Impact Statements stopped projects across the country. Anti-pollution laws slowed productivity way down.

Nixon understood that wage and price controls were futile, but he enacted them in 1971, with a total freeze for three months. He closed the gold window, too. Gas lines cropped up in 1973 because of price controls and an OPEC embargo. Lines and problems disappeared as soon as those artificial controls were removed.

Medicaid and social security were two programs that became huge, unsustainable programs after 1980. Defense spending was finally overshadowed by welfare transfer payments. A new addition, prescription drugs, will soon take up 90% of the federal budget.

Bibliography (PDF): Mises.org/CLBib

Lecture 9 of 10 from Robert Higgs’ Crisis and Liberty: The Expansion of Government Power in American History.