The World and Everything in It: January 8, 2024
On Legal Docket, a case that could open the door to a wealth tax in America; on the Monday Moneybeat, good and bad news in the 2023 jobs report; and on the World History Book, 60 years ago, President Lyndon Johnson declares a “war on poverty.” Plus, the Monday morning news
The U.S Supreme Court Associated Press/Photo by Mariam Zuhaib
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PREROLL: The World and Everything in It is made possible by listeners like me. Hi. My name is Melanie Lonto and I live in Northern Virginia with my husband, my 11 year old daughter who is a WORLD Watch fan, and our sweet puppy Daisy. I've just returned home from dropping my daughter off at school. It's a 40 minute drive one way, the perfect amount of time to listen to World Radio. I hope you enjoy today's program.
MARY REICHARD, HOST: Good morning! Today on Legal Docket: The Supreme Court hears a case some fear may lead to more taxes.
JUSTICE GORSUCH: In your brief at least, you confronted the question whether Congress could tax millions of Americans who hold small amounts of stock in their retirement investment accounts, and you say yes.
NICK EICHER, HOST: Also today the Monday Moneybeat, economist David Bahnsen joins us.
And, the WORLD History Book. 60 years ago today, LBJ takes on a problem no president has ever solved:
PRESIDENT JOHNSON: Our aim is not only to relieve the symptom of poverty, but to cure it.
REICHARD: It’s Monday, January 8th. This is The World and Everything in It from listener-supported WORLD Radio. I’m Mary Reichard.
EICHER: And I’m Nick Eicher. Good morning!
REICHARD: Up next, Kent Covington with today’s news.
KENT COVINGTON, NEWS ANCHOR: Border legislation » On Capitol Hill, lawmakers continue to wrangle over legislation to tackle the crisis at the U.S. southern border. Democratic Congressman Henry Cuellar represents a border district in south Texas.
CUELLAR: I think there's enough Republicans and Democrats that can say, Are we doing the right thing at the border, and if we have the right repercussions at the border, we can stop this historic numbers of people.
But some Republicans say they haven’t been particularly encouraged so far by the White House’s response to the border policy shifts Republicans are demanding.
House Speaker Mike Johnson, speaking with CBS News quoted the deputy chief of the Border Patrol, who said, “It's as if I'm at an open fire hydrant. I don't need more buckets. I need to turn the flow off.'"
JOHNSON: And the way you do that is with policy changes. We’re just asking the White House to apply common sense, and they seem to be completely uninterested in doing so.
The White House says Republicans have been pushing a radical agenda.
GOP lawmakers say they want the Biden administration to, among other things, reinstate the remain in Mexico rule for asylum seekers and end so-called catch and release policies.
Border report » As that debate continues, a new report confirms that the Biden administration has released millions of migrants from the U.S.-Mexico border inside the United States. WORLD’s Josh Schumacher has more.
JOSH SCHUMACHER: The Office of Homeland Security Statistics reports that the administration has released 2.3 million migrants inside the country.
But that figure does not include so-called got-aways. Those are people who border agents caught illegally crossing the border but were not able to apprehend.
Border officials have reportedly confirmed more than 1.7 million got-aways since January of 2021. That brings the total influx of migrants from the border under President Biden to at least 4 million.
But that number does not include migrants who evaded detection at the border altogether. And that means the total influx is likely much higher than 4-million.
Still, some say the report shows that the Biden administration is deporting more illegal immigrants than Republicans suggest.
For WORLD, I’m Josh Schumacher.
Government spending deal » Meantime, top lawmakers have reached an agreement to set spending levels for the current year which could head off a partial government shutdown.
The deal largely maintains the prior spending agreement. But it does make a small debt in Washington overspending with $16 billion dollars in additional cuts.
The agreement also speeds up $20 billion in cuts to the IRS and retracts $6 billion in unspent COVID relief funds.
Speaker Johnson called it a significant Republican victory. President Biden praised the deal for averting a shutdown. But …
Lawmakers still have to hammer out the details of the funding package.
Blinken in Jordan » Secretary of State Tony Blinken addressed reporters in Qatar on Sunday amid another round of high-stakes diplomacy related to the Israel-Hamas war.
BLINKEN: We have been intensely focused on working to prevent the conflict from spreading. And that is indeed a major focus of what is now my fourth visit to the region since October 7th.
Blinken met with leaders in Jordan and Qatar about containing the conflict and about providing more humanitarian aid to civilians in Gaza.
The secretary also said that civilians displaced by the war should be allowed to return home as soon as it's safe to do so.
He added that the United States rejects the calls by some Israeli lawmakers calling for a resettlement of Palestinians outside of Gaza.
Blinken’s latest Middle East tour, which includes visits to the UAE, Saudi Arabia, Israel, West Bank, and Egypt.
Lloyd Austin » Republican lawmakers say they’re alarmed by a lack of transparency at the Pentagon after Secretary of Defense Lloyd Austin spent much of the week in the hospital without providing proper notice to Congress.
Sen. James Lankford serves on the Senate committee that oversees Homeland Security and the functioning of the government.
LANKFORD: We’re at a time of a lot of turmoil international and suddenly the Secretary of Defense—more than just a matter of wasn't there—actually sent over false information saying and working from home when he’s not actually available at all that's a whole different issue.
Austin’s hospital stay was related to complications from an elective surgery. He’s said to be recuperating.
The secretary acknowledged the situation was not handled correctly and said, “I commit to doing better.”
Alaska Airlines accident » The National Transportation Safety Board is investigating a terrifying incident aboard an Alaska Airlines flight over the weekend.
NTSB Chairwoman Jennifer Homendy told reporters last night that investigators have been busy.
HOMENDY: They took photos and they identified the components that they want to send back to our lab for further evaluation.
Shortly after takeoff from Portland, Oregon part of the fuselage of the plane blew out in midair, forcing an emergency landing.
One passenger told KGW TV:
LE: We just heard like a loud, “bang!” or like a “boom!” and I look up and all the air masks are out, or down, and I look to my left and there’s this like, huge gaping hole.
It left a refrigerator-sized hole. But no one was seriously hurt.
Homendy said her agency still hasn’t found the part of the plane that blew out. Officials are asking residents and businesses in the area for help in locating it.
HOMENDY: This is a key missing component, and that’s why we want to find it.
The plane on which the accident occurred was a Boeing 737 Max, the same model that was grounded for nearly two years after a pair of fatal crashes. However, Boeing did not manufacture the part of the fuselage that blew out. It was installed by a different company.
Nevertheless, Alaska and United Airlines have been forced to once again ground their 737 Max jets while the FAA also looks into the matter. In the meantime, hundreds of flights have already been canceled.
I'm Kent Covington.
Straight ahead: wealth and taxes on Legal Docket. Plus, the Monday Moneybeat.
This is The World and Everything in It.
NICK EICHER, HOST: It’s Monday morning, January 8th, 2024. You’re listening to The World and Everything in It from WORLD Radio.
Good morning! I’m Nick Eicher.
MARY REICHARD, HOST: And I’m Mary Reichard. It’s time for Legal Docket.
The Supreme Court usually hears at least one tax-law case each term. And this year is no exception.
Interest in tax cases tends to be limited to inside the tax community. But this year’s tax case has generated a lot of interest outside the accounting world, as well.
EICHER: It has. And today, legal correspondent Jenny Rough is here to fill us in on what’s going on.
Good morning, Jenny.
JENNY ROUGH: Good morning to both of you.
EICHER: Yeah, so the name of the tax case is Moore v. United States. That is, taxpayer versus tax collector.
ROUGH: That’s a good way to put it.
Now, both of you know this, but one of the biggest reasons the Supreme Court agrees to hear a case is because there’s a circuit split in the lower courts: two conflicting views about one legal issue.
REICHARD: A “circuit split” meaning, various circuit courts within the U.S. Courts of Appeals issue different decisions on the same question of law. It takes the Supreme Court to resolve the conflict.
ROUGH: Right, but in today’s case, there is no circuit split. There’s been only one decision on this legal question, and it came out of the Ninth Circuit.
It’s the first case challenging a new tax law.
REICHARD: That’s brought about speculation as to why the Supreme Court has decided to step in here. Perhaps the court wants to weigh in here because—as you mentioned—this case involves a new and unusual type of tax.
ROUGH: I’ve certainly heard that, and what we talked about moments ago about the level of interest has to do with the possibility of an open door for more taxes.
Some see this as a lead-in to the possible institution of something called a wealth tax, meaning a tax on the net worth of the “ultra-rich”—a political term, not a legal one.
EICHER: Senator Elizabeth Warren proposed a wealth tax four years ago when she ran for president in 2020. A wealth tax would go beyond taxing income. It’s a tax on assets for households with a net worth above $50 million.
So let’s dive in and see if there’s anything to this.
ROUGH: Sounds good. But if you don’t mind, instead of diving in, let’s wade in. Begin with some foundational principles of tax law that will help us better understand our case today.
GIL ROTHENBERG: The income tax really didn’t start to hit the middle class or upper middle class until World War I.
That’s Gil Rothenberg. He’s the former appellate chief for the Department of Justice’s tax division.
ROTHENBERG: And that’s when the income tax first became a serious revenue raiser.
REICHARD: But even before World War I, Congress had imposed some income tax. The first, during the Civil War.
And the power of Congress to do so comes from the original Constitution. Article 1 says Congress has the power to lay and collect taxes. But it also says it does not have the power to lay direct taxes.
ROTHENBERG: Basically a direct tax has traditionally been understood as a head tax or a tax on property. So, for example, a Virginia resident who owns property pays property tax. There is no such thing as a federal property tax, because that would be a direct tax. That would be unconstitutional.
EICHER: In the 1890s, a question arose that asked whether the federal government could tax income on property, whether that’s income derived from tangible property, like rental income or income derived from intangible personal property, like interest and dividends.
ROUGH: That dispute led to a constitutional amendment. The 16th Amendment.
ROTHENBERG: The 16th Amendment essentially made income taxes on the fruits of owning property, such as rents, to be constitutional.
The 16th Amendment clarified that Congress can “collect taxes on incomes, from whatever source derived.” That’s the wording.
And our case today centers on what those words mean.
So we’ve talked about the tax collectors. Let’s now talk about the tax payers. We’ll begin in the year 2005. That’s when Charles and Kathleen Moore invested in a company called KisanKraft.
REICHARD: A friend of theirs started the business to provide equipment to impoverished farmers in rural India. The company’s based in Bangladesh. So it’s an American-owned foreign company.
Specifically, the Moores invested $40,000 in exchange for 13 percent of the common shares.
ROUGH: Let’s go back to Rothenberg who knows the ins and outs of tax law. He says certain tax rules do apply to foreign corporations like the one the Moores invested in.
ROTHENBERG: And one of the rules that applied to almost all foreign corporations was that you could earn income, and until you repatriated, meaning sent the money back into the U.S., it was not currently taxed.
EICHER: The Moores’ company did well. But instead of distributing dividends to its shareholders, the company reinvested its profits back into the business.
Because none of the money from the Indian company came back into the Moores’s pocketbook in the U.S., they got the advantage of the tax law. Their earnings weren’t subject to U.S. tax.
ROUGH: A legitimate tax shelter.
REICHARD: But just to be clear, if the Moores had received distributions or dividends, they’d have owed U.S. taxes on the income then.
ROUGH: Correct. At least, that was the case until 2017 and a change in the law. Congress passed the Tax Cuts and Jobs Act. It rejiggered the rules about how taxes would be imposed on foreign earnings.
Now when foreign earnings are repatriated back to the U.S. the Moores can take a 100 percent deduction. In other words, going forward they don’t have to pay taxes on dividends.
ROTHENBERG: So that was the new rule...
for income going forward.
ROTHENBERG: Now, what about income for previous years? What do you do with the transition situation?
EICHER: The Act imposed a transition tax—a one-time tax that went backward.
That meant the Moores had to pay a prorated share of the company’s profits from the time they first invested to the day in 2017 that the new rules took effect. It added up to about $15,000 in tax liability.
REICHARD: The Moores paid their taxes. But then they sued the government for a refund. They claimed the transition tax was an unconstitutional direct tax on their property.
But the Moores lost in lower court. The Ninth Circuit held that the 16th Amendment does allow the transition tax here.
Now, as a reminder, the constitutional amendment says Congress can tax “incomes, from whatever source derived.”
The Moores appealed to the Supreme Court.
ROUGH: Andrew Grossman was their attorney at oral argument, and he argued that the word “incomes” in the 16th Amendment means realized incomes. In other words, think of the word income as two words, “in” and “come,” meaning, gains that “come … in” to the taxpayer, like wages, rents, and dividends.
ANDREW GROSSMAN: It is undisputed that the Petitioners realized nothing from their stock investment. They were taxed not because they had any income but because, in 2017, they happened to own shares in a corporation carrying retained earnings on its books. This is a tax on the ownership of property.
But Justice Sonia Sotomayor disputed that realization was required:
JUSTICE SOTOMAYOR: But the amendment does not reference realization. All that the drafters had to do was add the word "realize" after "income" to lay and collect taxes on income realized, but they never used the word "realize."
Chief Justice John Roberts said income has been realized here by the company. Earnings went into its coffers.
JUSTICE ROBERTS: It isn't a case like appreciation of property where nothing has happened. You know, you buy a property, you're holding it for 20 years, you haven't sold it, nothing has happened. Here, something has happened, and income has gone to the corporation, isn't that right?
GROSSMAN: Yes. The corporation has income. But I think it really is like the instance of simply appreciation of property from the point of view of the shareholders. The value of their capital has increased. It has appreciated. But, as shareholders, no, they have not realized any income.
REICHARD: Solicitor General Elizabeth Prelogar advocated for the government. She argued that the drafters of the 16th Amendment would have had no problem with this tax.
ELIZABETH PRELOGAR: That's confirmed by the very first income tax Congress enacted under the Sixteenth Amendment. That 1913 law taxed certain shareholders on their pro rata shares of undistributed corporate earnings.
She made an analogy here to taxes Congress imposes on other organizations … like “S-corps” and partnerships. Individuals owe taxes on money the business earns whether or not a single dime is sent to their own bank accounts.
But Justice Neil Gorsuch saw a difference. Because with partnerships and S corps—
JUSTICE GORSUCH: —there's some enjoyment that the taxpayer has over that money, some control. He may assign it elsewhere. He may choose to keep it in the S Corp, whatever, but he controls it. But that argument, that this taxpayer had that kind of enjoyment, isn’t in the briefs before us.
EICHER: Gorsuch was probing to find out the limits to the government’s argument. Would allowing this tax open the door to all sorts of appreciation-based taxation?
JUSTICE GORSUCH: In your brief at least, you confronted the question whether Congress could tax millions of Americans who hold small amounts of stock in their retirement investment accounts, and you say yes. But you then say that would be administratively unworkable.
Justice Samuel Alito posed a similar question. He pointed out that the government defined “income” as economic gain between two points of time. So a tax on mutual funds that went up in value even though people hadn’t sold their shares?
JUSTICE ALITO: That would probably be permissible under your interpretation of the 16th Amendment?
PRELOGAR: I think it probably would. But I think the Court could draw lines based on history, and if there truly were a widespread tax on all amount of appreciation for every taxpayer, that wouldn't look like anything Congress has done before.
ROUGH: So in theory, sure. But in practical terms, not really. Tax expert Rothenberg, whom you heard from earlier, explained it this way:
ROTHENBERG: Practically, why I think that would never happen, well, if you want to do that on the upside, you have to also do it on the downside. It would cost a lot of money for people to figure out, what are my assets worth every December 31? An incredible administrative burden on the average American taxpayer.
To allay the wealth-tax concerns, the government pushed for a narrow ruling. One that Justice Brett Kavanaugh suggested. One that might not even need to address the 16th Amendment question about realized income.
JUSTICE KAVANAUGH: Because even assuming or leaving open whether realization is a constitutional requirement, there was realized income here to the entity, and then it's attributed to the shareholders in a manner consistent with how Congress has done that and this Court has allowed.
So perhaps that’s the route the court will go.
Taxes are the price we pay for a civilized society. So we have street lights, schools, and aircraft carriers. Pros and cons will apply to all forms of tax. But a wealth tax seems fraught with constitutional problems.
And that’s this week’s Legal Docket. I’m Jenny Rough.
MARY REICHARD, HOST: Coming up next on The World and Everything in It: the Monday Moneybeat.
NICK EICHER, HOST: Alright, time now to talk business, markets, and the economy with financial analyst and advisor, David Bahnsen. David is head of the wealth management firm, the Bahnsen Group, and he joins us here now. David, good morning.
DAVID BAHNSEN: Well, good morning, Nick, good to be with you.
EICHER: Well, David, just a moment ago, you heard our reporting on the not very high likelihood that the Supreme Court will open the door to a wealth tax. But because we did touch on it, I'd like for you to talk a bit about the economics of a wealth tax. And given that you have devoted an entire book four years ago to the economic ideas of Senator Elizabeth Warren—back then she was running for president and doing quite well. But what do you think a wealth tax would mean, economically, if it ever happened?
BAHNSEN: Well, I think that in the form of a wealth tax as both candidate Warren and candidate Bernie Sanders proposed a number of years ago, there is very close to a 0% probability that it could ever be implemented. Larry Summers, who is a center left economic icon in contemporary American politics, a Neo-Keynesian intellectual, who was the Treasury Secretary under Bill Clinton, he was President Obama's economic council director, and former president of Harvard University, but although not guilty of plagiarism. And Larry Summers has written a fantastic op-ed in the Washington Post, explaining why the wealth tax is simply a terrible idea. And the reasoning comes down to it doesn't work.
Now I make constitutional arguments, I make other ethical arguments against the notion of the state having a vested interest in the growth of family wealth, but the practicality of it kills it because the motive behind it is what to raise revenue. And it won't raise revenue, it'll misallocate resources, it will cause poor behavior, it will incentivize people to hurt the value of their own stock every year at the end of assessment period, before building it back up. It will divert monies into hard to measure hard to value assets, antiques and artwork and jewelry and, and whatnot, there is such an incredible incentive for misallocation.
And like I said, misbehavior with a wealth tax, that it's really stunning that we're even having to have the conversation. But what is really behind it is not a disagreement with anything I just said Bernie Sanders and Elizabeth Warren, are not driven by their belief that a wealth taxes efficient. They're driven by a social justice mantra that says, we just don't like wealthy people. And this is their way of trying to deal with it.
EICHER: Well, David, let's talk jobs because at the end of year figures have come in and they beat expectations. Employers added more than 200,000 jobs in December, the unemployment rate still below 4%, clocking in at 3.7. So for the year, then, a total of 2.7 million jobs added in 2023. They say that is the fifth best since the year 2000. So you saw it anything not to like in the latest jobs report?
BAHNSEN: Yeah, I didn't like the labor participation force dropping again, I think it was 676,000. And I'm obsessed with that number. I do want to be careful, Nick, when we talked about the absolute number of jobs created over a period of time, like 23 years. I don't really believe that's ever the way to measure it, because it's not population adjusted. And so having 200, well, last year, 2.7 million jobs created in a population of 2023, and comparing that to the jobs created and what the population was in 2000, is a real significant apples to oranges. Yet, the point is not wrong, that it was a great year for job growth. It's slowed versus the year prior.
But what people have to remember is that 2022 had a significant amount of jobs coming from the post COVID moment that there were jobs being re-covered in 2022, from the shutdowns and 20 and 2123. That's not the story. And so if you look back a year ago, where the amount of people who were predicting recession amount of people that were predicting significant job deterioration, there's no question 2.7 million is indicative as of a stronger than expected jobs economy. The wage growth is about 4%, meaning real wages grew modestly. And even though I think there's a real concentration of where the job growth is largely coming from now. This wasn't true for the whole year, but for the past few months, there is more in just a couple of sectors health care, government and media. in hospitality, and there's obviously a jobs recession going on in manufacturing. But that is not likely to last either.
I do think that there are certain reshoring and onshoring activities taking place in terms of some of the industrial sides of the economy that are probably see jobs come back there, too. So look, I don't have a partisan answer for anybody here. I think there's stuff in what I believe is empirically true. That might upset either side who's trying to gauge this politically? I'm just not trying to do that. I'm trying to gauge it economically. But if we want a broader, more realistic cultural answer, that's a little more sobering. I maintain my belief that our problem will probably not end up being that there's not enough jobs, it will end up being that there's not enough workers. And that's a totally different thing. And one could argue culturally, it's worse.
EICHER: David, what is your sense, just looking at the disruptions in the Red Sea with the Houthi attacks on commercial shipping? I, I see it's not driven by oil prices. But I keep seeing these headline stories, fears of a wider war related to Israel and Hamas. But what are the markets sensing? Are they sensing any of these fears at all?
BAHNSEN: Well, in a sense, Nick, you answered your own question, because we have to decide what we believe in more: a headline that pops up saying, there's incredible distress and fear and uncertainty happening in the in the streets of, you know, the Red Sea, and this and that, or oil prices, trillions of dollars of real life activity? So oil is still sitting in around $74, as we're talking, it has been in the low 70s. It's been in the high 70s. It's been in a very tight range ever since October 7. And even in the course of this story with Iran, and the company that announced they were going to pull their shipping activity out of the Red Sea temporarily, oil prices went down. So I don't have an explanation.
This is the beauty of hierarchy and price discovery. I don't have to have a story as to why that is. Prices are telling me they are coordinating a lot of knowledge that I don't have, and telling me that they do not anticipate a macro story out of what's happening. That's not to say, by the way, that there's not a permanent macro story of instability in the Middle East of different groups of people, whether it be Jews, Sunnis, Shiites, you know, Christians, west east, political. There's all sorts of people who hate each other in a region that have spent hundreds of years trying to kill each other. There's really bad things going on. And I have very strong opinions about who the good guys and bad guys are morally and politically, but economically, that geopolitical tension has been baked in forever. And do I think there's any particular outlier of geopolitical distress that has risen in the last week or two? The answer clearly is no.
EICHER: Alright, David Bahnsen: founder, managing partner and chief investment officer of the Bahnsen Group. David's very good new year look ahead report will be available this morning. When his staff post it online, you'll find it at dividendcafe.com. We'll hit some of the highlights of that white paper next week. But again, available this morning on dividendcafe.com. David, thank you.
BAHNSEN: Thanks so much, Nick. Great to be with you.
NICK EICHER, HOST: Today is Monday, January 8th. Good morning! This is The World and Everything in It from listener-supported WORLD Radio. I’m Nick Eicher.
MARY REICHARD, HOST: And I’m Mary Reichard. Up next, the WORLD History Book.
SPEAKER JOHN MCCORMACK: Members of the Congress. I have the great pleasure of presenting to you the President of the United States. [APPLAUSE]
60 years ago the president is Lyndon Baines Johnson. He’s appearing before a joint session of Congress in his first State of the Union speech as president, following the shock of the assassination of President Kennedy.
During his address Johnson outlines his administration’s priorities—including the so-called war on poverty. WORLD Radio executive producer Paul Butler presents a few excerpts of this notable speech.
PRESIDENT LYNDON B. JOHNSON: Mr. Speaker, Mr. President…
PAUL BUTLER, EXECUTIVE PRODUCER: As a former speech teacher, I appreciate President Johnson’s opening line from January 8th, 1964.
LYNDON JOHNSON: I will be brief, for our time is necessarily short and our agenda is already long.
Compared to many modern State of the Union addresses, it is definitely shorter—coming in under 45 minutes. President Johnson doesn’t spend much time on formalities, but jumps right in with his hopes for the Congress.
JOHNSON: Let this session of Congress be known as the session which did more for civil rights than the last hundred sessions combined; as the session which enacted the most far-reaching tax cut of our time…
There’s a lot riding on this speech. While it’s only been seven weeks since the assassination of John F Kennedy, the short season of political solidarity is already waning. Plus he faces an election in 10 months.
JOHNSON: If we fritter and fumble away our opportunity in needless, senseless quarrels between Democrats and Republicans, or between the House and the Senate, or between the South and North, or between the Congress and the administration, then history will rightfully judge us harshly.
As president, Johnson has his work cut out for him as he must convince Congress to follow through on measures JFK began.
JOHNSON: Let us carry forward the plans and programs of John Fitzgerald Kennedy – not because of our sorrow or sympathy, but because they are right. In his memory today, I especially ask all members of my own political faith, in this election year, to put your country ahead of your party, and to always debate principles; never debate personalities.
Johnson cleverly—yet tastefully—evokes the memory of Kennedy, masterfully encouraging Congress to embrace the former President’s civil rights bill and tax cuts. For his part, he promises to cut spending.
JOHNSON: For my part, I pledge a progressive administration which is efficient, and honest and frugal. The budget to be submitted to the Congress shortly is in full accord with this pledge.
Besides committing to cut the ten billion dollar deficit in half, President Johnson promotes reducing the federal workforce. He also calls for responsible arms control, and working more closely with international allies. But the speech is most remembered today for Johnson’s surprising declaration of war…
JOHNSON: This administration today, here and now, declares unconditional war on poverty in America…Poverty is a national problem, requiring improved national organization and support. Our joint Federal-local effort must pursue poverty, pursue it wherever it exists – in city slums and small towns, in sharecropper shacks or in migrant worker camps…among the young as well as the aged, in the boomtowns and in the depressed areas. Our aim is not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it. No single piece of legislation, however, is going to suffice.
In the years following this speech, the Johnson administration will clarify this vision—calling it “the great society”…which some believe ends up making the problem worse…not better. However, for now, Johnson doesn’t offer many specifics. But as everyone is against poverty, it’s an easy sell. It’s a common public speaking technique. Give the audience something to agree with, then try to build on that good will as the speaker moves to something more controversial.
President Johnson turns his attention to civil rights.
JOHNSON: Today, Americans of all races stand side by side in Berlin and in Viet Nam. They died side by side in Korea. Surely they can work and eat and travel side by side in their own country.
Johnson delivered his first speech before a joint session of Congress shortly after the death of President Kennedy. In that speech his pledge to fight for civil rights was warmly received…but this time, it seems little more than polite applause. Undaunted, Johnson once again raises the specter of JFK before making his final appeal.
JOHNSON: John Kennedy was a victim of hate, but he was also a great builder of faith – faith in our fellow Americans, whatever their creed or their color or their station in life; faith in the future of man, whatever his divisions and differences. So I ask you now in the Congress and in the country to join with me in expressing and fulfilling that faith in working for a nation, a nation that is free from want and a world that is free from hate – a world of peace and justice, and freedom and abundance, for our time and for all time to come.
The next day, supporters and critics alike praise President Johnson’s speech in the papers. It reassures a troubled nation that Johnson will stay the course. And Congress seems convinced as well…as they work with the president to pass both the Revenue Act and the Civil Rights Act of 1964.
Later that year, Johnson goes on to easily win the election with 61 percent of the vote and the widest popular margin in American history.
That’s this week’s WORLD History Book, I’m Paul Butler.
NICK EICHER, HOST: Tomorrow: does the 14th amendment allow states to kick Donald Trump off the ballot? We’ll talk it over with an attorney who’s studied the question. And, celebrating 100 years of a beloved piano composition. That and more tomorrow.
I’m Nick Eicher.
MARY REICHARD, HOST: And I’m Mary Reichard.
The World and Everything in It comes to you from WORLD Radio. WORLD’s mission is biblically objective journalism that informs, educates, and inspires.
The Psalmist writes: “What is man that you are mindful of him, and the son of man that you care for him? Yet you have made him a little lower than the heavenly beings and crowned him with glory and honor. You have given him dominion over the works of your hands; you have put all things under his feet, all sheep and oxen, and also the beasts of the field, the birds of the heavens, and the fish of the sea, whatever passes along the paths of the seas.” — Psalm 8:4-8
Go now in grace and peace.
WORLD Radio transcripts are created on a rush deadline. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of WORLD Radio programming is the audio record.
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