The Eisenhower way can unblock US logjam

A standard laugh line from one of my political risk boardroom briefings is: “I am the last Eisenhower Republican left in the world; by all rights I should be stuffed and put in a museum as the last of my kind.” Like many jokes, it is funny because it contains more than a kernel of truth. This is a great pity, because the centrist, moderate, bipartisan ethos of the great man is precisely what is lacking in Washington, and what the country yearns for.

I am just reading Jean Edward Smith’s great biography of “Ike,” “Eisenhower In War and Peace,” and I must admit to a surge in longing for his style of leadership and for his underrated presidency, which, like Smith, I rate as the second greatest of the 20th century — eight years of peace and prosperity only outdone by Franklin Roosevelt. Aphorisms such as, “Ideologues are people who go to the gutter on either the right or the left and hurl rocks at those in the center,” and, “Those who take the extreme positions in American political and economic life are always wrong,” make clear that it is necessary for the US to rediscover the Eisenhower way of thinking.

All of which brings me to the present congressional impasse over President Joe Biden’s two mammoth spending bills. Both Republicans and Democrats have adopted the maximalist positions that Eisenhower so admirably despised. Republicans act as if American infrastructure doesn’t need an upgrade. At the same time, Democrats act as if they have carte blanche to enact any legislative program they have ever dreamed of, and never worry about the cost. One imagines Eisenhower throwing both parties out of his office in short order; despite his famous grin and easy charm, all accounts point to the president having a ferocious temper.

The reason Ike is so key to the present situation is that, historically, he understood the motivations of both sides. It was Eisenhower who last spent mammoth sums of money on US infrastructure in the 1950s, with the establishment of the interstate highway system and the St. Lawrence Seaway. At the same time, the famously frugal Ike managed to be the last president to regularly balance the federal budget. This middle Eisenhower way — understanding both the need to spend wisely and the need to actually say “no” — is precisely what is missing from today’s debate, and what is needed.

Both Republicans and Democrats have adopted the maximalist positions that Eisenhower so admirably despised.

Dr. John C. Hulsman

Biden’s two new spending bills would together amount to the largest increase in federal peacetime spending as a percentage of US gross domestic product (GDP) since the Eisenhower era. According to the Committee for a Responsible Federal Budget, average federal spending has been 21 percent of the country’s economic output over the last half-century, rising to 24 percent after the 2008 financial crisis and 32 percent during the present pandemic. In order to avoid crowding out more profitable private sector activity, to eschew European-style social democratic economic sclerosis, and to keep inflation from raging again (June’s 5.4 percentage rate was the highest in the last 13 years) and federal debt under control, this rate of overall federal spending must be contained, despite the fevered wishes of progressive Democrats everywhere.

This is why it is certain that Eisenhower would be against the present Democratic wish list bill, which is a huge $3.5 trillion initiative hatched by the avowedly social democratic Sen. Bernie Sanders, chairman of the Senate Budget Committee, and endorsed by Biden and the Democratic Party. If enacted, the US would simply become another overly entitled, under-producing European-style country, with vast increases in the child tax credit and healthcare subsidies, a new family paid leave program, and increases in Medicare benefits.

Tellingly, it has not yet been revealed how this left-wing wish list will be paid for, but increasing taxation will be utterly necessary, damaging long-term growth (as individuals are regularly more productive than government technocrats) more than the new programs will help it. For all these good Eisenhower reasons, the wish list bill must be voted down.

However, our 34th president would also turn on do-nothing Republicans, who are unprepared to vote for wise federal spending that serves the country. While, over the past 50 years, federal spending as a percentage of GDP has remained constant, its composition has changed dramatically. In 1969, public investment accounted for a third of federal outlays; by 2019, this total had shrunk to just 13 percent, while entitlement programs like Medicare, Medicaid and Social Security had risen to an alarming 70 percent.

Biden’s second bipartisan bill would devote almost $600 billion in new money to hard infrastructure (roads, bridges, water systems, the electrical grid, and broadband), a desperately necessary upgrade, as is clear to anyone who has recently traveled anywhere in the country. Ike would favor this bill as making America fit for purpose in our new era.

However, if the Democratic Party gets its way and both bills are passed, there will be more than $4.1 trillion in new federal spending, on top of the $1.9 trillion COVID-19 relief bill that was enacted in March. As the federal debt nears 100 percent of GDP and with the inflation monster unwittingly being set loose, Eisenhower’s moderate good sense is needed now more than ever.

• Dr. John C. Hulsman is the president and managing partner of John C. Hulsman Enterprises, a prominent global political risk consulting firm. He is also senior columnist for City AM, the newspaper of the City of London. He can be contacted via chartwellspeakers.com.