The Economic Meaning

November 12, 1956

What is the meaning of the Eisenhower victory, and what, specifically, will be its consequences for American business?

It is not yet possible to answer these questions in simple or precise terms. In large part Mr. Eisenhower’s reelection is an endorsement of a personality. It is significant that the chief campaign slogan this year, as in 1952, was “I like Ike,” not “I like Ike’s policies.” In the four years since his first election, the President may have lost standing in the public mind as an administrator, but he has not lost stature as a man.

He has, indeed, even more deeply impressed the American people with his earnestness and integrity, his devotion to the national welfare, the national security, and world peace, and with his personal modesty and amiability. He has revealed in remarkable degree the Lincolnesque quality of “malice toward none, charity for all.” And this absence of malice has been especially felt by millions of voters who doubted that absence in Franklin D. Roosevelt or in Harry Truman. Mr. Eisenhower will go down in history as a magnanimous man, above personal spite or vindictiveness.

WHAT MANDATE?

Has the President been given a “mandate” by the American people? And if so, what is that mandate? This question is difficult to answer because the issues in the last campaign were so many and so mixed. We will be nearer to an answer when there has been time to analyze the make-up of the new Congress, not only as regards the exact number of Republicans and Democrats elected, but the exact division between conservatives and radicals, between advocates of centralized power and advocates of states rights, between economizers and super-spenders.

But what is at least indisputable with regard to the Presidential vote is that, insofar as the American people had a choice, they voted for conservatism as against an extension of radicalism, and for a stable dollar as against still more inflation. Stevenson and Kefauver, as the campaign wore on, made it increasingly clear that they favored more government spending and interference, more centralization of power and more socialistic measures in nearly every direction. The Democratic platform came out for income-tax cuts that alone would have reduced revenues by $4.5 billion. Such a combination of increased spending and huge tax cuts would in itself have meant more inflation. In addition, the Democratic platform had denounced the so-called “hard-money policy” as “a time bomb . . . against full prosperity.” This meant that a Democratic Administration would have reinstated a cheap-money policy which could only have led at this time to a very dangerous inflation.

AGAINST INFLATION

It is true that Mr. Eisenhower in the last four years has continued and even expanded many New Deal policies. But he has also refused to continue some important New Deal policies—notably further Federal socialization of electric power. The reckless proposals of Stevenson and Kefauver forced the President in the latter part of his campaign more and more to emphasize his own comparative conservatism.

It is quite possible, therefore, that Mr. Eisenhower’s policies in his new term will become more conservative. He will doubtless continue to respect the independence of the Federal Reserve Board, and will continue to view with concern any development that threatens further erosion of the value of the dollar.

This is the interpretation most likely to be put on the election results by most businessmen. If that assumption is correct, they will go ahead with their current plans. Business confidence, insofar as the election results play a part in it, should continue high in the immediate future.

But even if Mr. Eisenhower does not become more conservative than he has been in the last two years, the Republicans in the new Congress, if they wish their party and their record to be meaningful, will resist the pressures for further expansion of Federal powers, big spending, inflation, and increasing governmental control over our lives.