Shadow Government

Looking back on Ike's farewell address

The 50th anniversary of President Eisenhower's farewell address is approaching. Eisenhower's Jan. 17, 1961 speech -- next to George Washington's farewell address, perhaps the most significant valedictory in presidential history -- is most remembered for his warning against the "military-industrial complex." Its concerns remain salient today, and not merely on the defense budget.

President Eisenhower's overriding concern in the speech, and throughout his presidency, was over how his beloved nation could preserve its exceptional character, liberty, and strength, while protecting itself against new foes. His description of the communist foe was unsparing: "We face a hostile ideology -- global in scope, atheistic in character, ruthless in purpose, and insidious in method."

Yet no matter the threat, the United States needed to respond in a way that remained true to its character as a nation. It was in this context that he identified two particular domestic threats. The first, the "military-industrial complex," is the most well-known and often invoked. Less remembered is the second threat of U.S. public policy being captured by a "scientific-technological elite" from government funding that coopted research and scholarship in the service of the state. This monopoly, he worried, would stifle the spirit of enterprise and intellectual inquiry, and more ominously could substitute soulless technocrats for the scholarly and spiritual leaders who served as the nation's conscience.

Eisenhower did not see, or offer, simplistic solutions to these complex problems. Rather, he held firm to certain principles while urging prudence, wisdom, and balance in their implementation. His call for balance in his farewell address marked a preoccupation during his entire presidency. "It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new and old, within the principles of our democratic system -- ever aiming toward the supreme goals of our free society."

Mindful of Eisenhower's efforts at balance, a comparison of defense spending between his day and our day is revealing. Rather than absolute dollar amounts, for scale the two most relevant figures to compare over time are defense spending as a percentage of the overall federal budget, and defense spending as a percentage of the nation's GDP. For all eight years of Eisenhower's administration, defense spending comprised over 50 percent of the entire federal budget, and in some years came close to 70 percent. Interstate highways notwithstanding, the defense budget virtually was the federal budget. Relative to the entire national economy, the Pentagon budget was around 10 percent of U.S. GDP. The 1960 budget, reflecting his previous efforts at restraint, still had national defense at 52.2 percent of federal outlays and 9.3 percent of GDP. In short, Eisenhower was trying to reign in a Pentagon that consumed over half of his entire government's budget and a tenth of his nation's economic output. He feared the prospect of his nation becoming a self-perpetuating militarized garrison state.

Those figures today are substantially different. Even including the Afghanistan and Iraq war budget supplemental appropriations, the United States' 2010 military spending is 19 percent of total federal outlays and 4.7 percent of national GDP -- both figures less than half what they were in Eisenhower's day. Moreover, Eisenhower's budgets did not have to support two ongoing wars such as Iraq and Afghanistan. Budget-wise, the United States today has little danger of becoming a military republic, but instead does face the very real danger of bankruptcy and fiscal collapse due to out of control entitlements and a national debt of cartoonish proportions.

How does this bear on the looming debate on the U.S. defense budget? Three recent thoughtful articles by Ted Bromund, Tom Mahnken, and Kori Schake, all published at ConservativeHomeUSA, take different vantage points yet in their own way are concerned with the same question that preoccupied Eisenhower: How can the defense budget reflect and protect America's values? (Regular readers of Shadow Government know that Tom and Kori are two of our valued contributors, and we happily consider Ted a fellow traveler). For Kori, an undisciplined defense budget amidst runaway deficits threatens the core American values of limited government, fiscal prudence, and economic dynamism. For Tom, the debate is not one of dollars and cents but of the U.S. government's primary task to protect our way of life and project power responsibly. For Ted, a parsimonious treatment of the defense budget as just another line-item in the federal budget puts at risk the core American values of sovereignty, liberty, and national exceptionalism.

Each of these concerns echo similar ones voiced by our 34th president a half century ago. And each writer offers substantive first principles that should be foundations, rather than just afterthoughts, in the looming debate over the defense budget.

How to respond? As Kori warns, not by continuing unfettered spending in any area, including the defense budget where some prudent pruning can and should be done on existing accounts. Health care and pension costs are one obvious place to start. As is a substantial reduction in domestic spending and entitlements in the overall federal budget. Tom also sees the deficit as a national security problem, yet argues that the current gap between the military budget and our strategic commitments is large and growing, and not funding the military will in time prove far more costly. And as Ted contends, spending on national defense should not be treated as just another piece of green eyeshade fodder in the budget, no different than ethanol subsidies or Medicare overhead. National security responsibilities arise from our Constitutional order and national identity itself, and are the first and most essential task of government.

Mindful of these concerns, Eisenhower's parting caution remains as relevant today. "We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow."

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Shadow Government

Milton Friedman was right, Thomas Friedman is not

In a column again lamenting the benighted state of the United States, Thomas Friedman criticizes China's treatment of Nobel laureate Liu Xiaobo. Liu is a political prisoner serving an 11-year sentence for subverting state power. Of course, just a bit more than a year ago, Friedman was comparing the U.S. government with China's -- unfavorably!

On Sept. 8, 2009 he wrote, "[I]t is hard not to draw the following conclusion: There is only one thing worse than one-party autocracy, and that is one party democracy, which is what we have in America today. One party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages."

Friedman went on to note approvingly Beijing's ability to command orderly entry into the clean technology industry, versus the United States' reliance on chaotic markets.

Of course, Milton Friedman understood, but Thomas Friedman apparently does not, that over the long haul, capitalism and freedom work together, and that they are not separable from each other. The Beijing government's powers to throw a human rights activist in jail and to command massive economic projects are of a piece. They are antithetical to representative democracy and rule of law.

It is understandable that in these tough times people will question how well our system is working, but some perspective is necessary. The past 100 years of U.S. economic performance are unmatched in human history. The engine of the U.S. economy powered enormous improvements in the health, welfare, and living standards of hundreds of millions of people. The political and economic freedoms guaranteed by our system of government made such prosperity, innovation, and achievement possible.

Twenty-five years ago, the passing intellectual fancy was the United States' decline relative to another rising Asian power, Japan, because of Tokyo's ability to plan economic growth and manage private sector investment. Such predictions look silly today.

Warren Buffett, who has the true perspective of a long term investor, has observed, "In the 20th Century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497."

As we consider what is next for the United States, rather than turning to the coercive power of centralized planning, as Thomas Friedman seems to consider, we should affirm our confidence in the values that have brought us so far -- capitalism and freedom -- as Milton Friedman knew. Nobody ever made money for long by selling America or American values short.

Nancy Ostertag/Getty Images for AFI