VALEDICTORY
Thirty Years of Progress--Mostly
Leaving the helm of The Wall Street Journal, I'm optimistic about America's future.
Since I'm shortly to become editor emeritus of The Wall Street Journal, this juncture is a time for reflection on the 30 years I've been running these editorial pages. These reflections bring a perspective to the times we're living through. Certainly these are troubled times. For the Journal, the terrorist conflict has been up close and nasty. We had nearly 3,000 people killed across the street from our headquarters, and were scattered in temporary locations for a year after. We were proud of putting out a newspaper, a magnificent one, on Sept. 12, 2001, and lucky that none of our colleagues died. But many of us did lose friends, and one of our reporters was kidnapped and brutally killed by terrorists in Pakistan. And terrorism is only the most prominent of a litany of troubles involving war, civil liberties, recession and a sagging stock market.
My message today, though, is that things could be worse; indeed, they have been worse. Let me take you back to January 1972, when I took the editorial helm. This wasn't merely a troubled society, but one in the process of coming unglued. Crime rates and out-of-wedlock births were rising, and we had experienced a "long hot summer" of riots. Abroad, America was mired in Vietnam and the Communist empire was on the march. Economically, we were on the cusp of a new and dispiriting era. Huge legal and constitutional controversy lurked ahead. My career has consisted of watching these dire trends unfold, and watching this remarkable society overcome them.
I was an onlooker, occasionally a participant and always a cheerleader in this transformation. In the position I've held, you have to have views and make comments on all aspects of the human condition. But my own preoccupation has centered on three of these issues in three phases. Roughly, the military balance and competition with the Soviet Union in the 1970s, the economic dilemma in the '80s, and in the '90s moral and ethical issues in government. In each of these areas the Republic has made real progress, and from a journalistic viewpoint, I like to think I've found a lot of news.
From a distance of 30 years, it grows hard to recall how passions over the war in Vietnam totally dominated both foreign policy and domestic politics. Nineteen seventy-two was the year Jane Fonda visited Hanoi, broadcasting antiwar propaganda, George McGovern called for "immediate and complete withdrawal" from Vietnam, and the Associated Press published Nick Ut's unforgettable photograph of a naked girl hit by napalm. The U.S. withdrew its last combat soldiers from the country that year, but every covering attack sparked protests on the home front.
These events on the battlefield ran in tandem with larger geopolitical developments. In 1972, the Soviet empire was approaching its apogee. Between 1966 and 1970, the Soviet Union expanded its strategic missile force, bypassing the U.S. In 1972 we saw the first Strategic Arms Limitation agreement, with the U.S. dropping its ABM system, and the Soviets codifying their lead in missile throw weight. Against Sen. McGovern's complete and immediate withdrawal from Vietnam, President Nixon offered arms control and détente with the Soviets. Aided by prosperity and the ineptness of the Democratic campaign, he won one of the greatest landslides in history, marred only by the "two-bit burglary" at the Watergate office complex.
In retrospect it seems that without Watergate we'd have had a far different outcome in Vietnam. In 1972, U.S. air and naval power had allowed the South Vietnamese to repel a major offensive, with the North suffering 100,000 causalities and relieving the legendary general Vo Nguyen Giap from command. Two years later, six weeks after the resignation of Haldeman and Ehrlichman, Congress passed the Case-Church amendment forbidding further U.S. military involvement in Southeast Asia. In March 1975 the North Vietnamese repeated their 1972 offensive against the demoralized South. On April 29, 1975, helicopters started an airlift from the U.S. Embassy to three aircraft carriers offshore; the next day the last American left Vietnam and the Communist flag flew over Saigon.
In the interactions of Vietnam, détente and Watergate lies the key to this juncture of our history. In the midst of 1972, one of our editorials said, "A look at the strategic arms pact signed in Moscow Friday at least clears up the mystery of why the Russians went through with the summit despite the mining of Haiphong." It was too good a deal for the Soviets, I complained. In the fullness of time, perhaps trading arms agreements for a way out of Vietnam was not so bad a bargain. The peace agreement with the North, at the very least, freed our airmen held in the Hanoi Hilton. And restoring domestic tranquility rent by Vietnam was essential.
Still, for the ultimate happy outcome, I think we arms-control skeptics can also claim a good slice of the credit. By 1972 I was immersed in the strategic-arms debate. I could never understand why defensive missiles were worse than offensive ones. Yet the expert view proposed to deter a missile exchange by negotiating a balance of terror ensuring that both societies would be destroyed. This was mutual assured destruction, or "MAD." Rebellion against MAD was the start of my long association with Albert Wohlstetter, Pentagon consultant and strategic fountainhead.
Many within the government, who felt the arms-control process was locking the U.S. into a position of inferiority, were happy to come to New York and talk to a friendly journalist. So I was able to produce a series of scoops. I sparked a Pentagon investigation by reporting the MX memcon, a memo of a conversation between the chairman of the Joint Chiefs and his Soviet counterpart, who rebuffed the American assumption that the MX missile enclosed in a bunker would not count as a "mobile missile" under the treaty. In February 1976, I had an exclusive dispatch on the negotiations in Moscow to confirm agreements ostensibly reached at the Vladivostok summit by President Ford and Leonid Brezhnev. It included the news that agreement had been blocked by revolt at a meeting of the National Security Council the previous Wednesday. That Wednesday night was when détente ended.
I soon found myself invited on a trip to China by James Schlesinger, who'd been fired as defense secretary for opposing that policy. By chance Mao Tse-tung died while we were there. I was the only newspaperman in China at the time, and was able to file a report of attending Mao's funeral, especially appreciated by The Asian Wall Street Journal, then in its first week.
In 1976, President Ford faced a brief challenge in the Republican presidential primaries from an untested candidate named Ronald Reagan. I have a letter from him that reads, "Dear Mr. Bartley: Opening last Friday's Wall Street Journal to find the article excerpting my speech on détente and foreign policy was a very nice surprise. I'm both flattered and grateful. Many thanks. Sincerely, Ronald Reagan."
We arms-control critics had always argued that despite the agony of Vietnam, America's people could be rallied to resist the Communists. This is what President Reagan understood, and proved. No fewer than four times, he predicted that communism was about to collapse. No one, including me, took the predictions seriously, and we were surprised when the Berlin Wall tumbled down in 1989. In the darkest days of the Cold War, shortly after losing Vietnam on the home front, it was easy enough to be pessimistic about the American people. But President Reagan's optimism proved wiser and more enduring.
Nineteen seventy-two was also a vintage year on economic policy. On Aug. 15, 1971, President Nixon declared an economic emergency, imposing wage and price controls, and closing the "gold window"--refusing to supply gold for dollars held by foreign central banks, and divorcing the value of the dollar from even a slim tether to anything real. But with Fed Chairman Arthur Burns pumping out money, and controls temporarily curbing inflation, Nixon put in place the "prosperity" plank in his re-election effort, though a temporary and artificial one. After the Aug. 15 shock, John Brooks, that elegant commentator, voiced "a suspicion that the president and his advisers, in making their Draconian move, did not understand what they were doing." What they were doing was unleashing a wave of inflation around the world. To be fair, not many understood this at the time. A few lonely voices did, such as de Gaulle adviser Jacques Rueff and Yale's Robert Triffin. They were the few who understood the international dimensions of economics.
The era of sustained American and world economic growth from 1950 to 1973 was also the era of Bretton Woods, of fixed exchange rates anchored to the dollar, which was anchored to gold, the historical center of monetary systems. In the death throes of Bretton Woods, sealed that Aug. 15, central banks were rapidly accumulating international reserves, mostly dollars. The surge in reserves forecast a surge in prices. One body understood this, the Organization of Petroleum Exporting Countries. Within five weeks of the closing of the gold window, its member countries resolved to renegotiate prices with oil companies "to offset any adverse effects on the per barrel real income of Member Countries" of Aug. 15, 1971. Here, the "energy crisis" was born.
The Watergate era, meanwhile, gave us the economic equivalent of Case-Church, the Congressional Budget Control and Impoundment Act of 1974. This sharply reduced executive sway over spending on the promise that Congress would assume responsibility for budgetary discipline. Inflation rose to 11% in 1974 and 9.1% in '75, while real GDP fell 0.3% in each of these years. We coined a word, stagflation, meaning simultaneous stagnation and inflation. Since this combination was considered impossible in the Keynesian economics of the time, our economy was lost at sea without a compass.
When Mr. Reagan took office in 1981, the focus was on restoring the economy, primarily by cutting taxes. The Journal made itself the mouthpiece of "supply-side economics," which became an intellectual justification for the Reagan tax cuts. But it was all pretty much presaged in the Reagan campaign document Policy Memorandum No. 1, written by Martin Anderson in August 1979. It excoriated the view that there's a trade-off between growth and inflation, and said that taxation was "stifling the incentive for individuals to earn, save, and invest." This was the essence of the supply-side idea, that to solve "stagflation" you could separate monetary and fiscal policy, using tight money to combat inflation and tax cuts to spur growth.
Now Arthur Laffer grabbed attention with the Laffer Curve--the argument that a tax cut can yield more revenues for the government. But the key notion, a "policy mix" separating monetary and fiscal policies, was the insight of Robert Mundell, who's been my economic guru ever since. His policy mix did resolve stagflation. Paul Volcker's tight money cured inflation, and Mr. Reagan's tax cuts sparked a boom starting in the first quarter of '83 and running to the 1990 recession. I wrote a book about it called "The Seven Fat Years." With the shallowness of the 1990 recession, Bob Mundell says I should now do "17 fat years." He also believes that the '82 recession resulted from a timing mismatch. Tight money came so much earlier than tax cuts; if they had come simultaneously the recession might have been avoided.
In the '80s, the economics profession respected Mr. Mundell for his contribution to international economics, but considered his broader views eccentric at best. But in 1980 the profession saw no answer to inflation except a protracted recession; Bob took the optimistic view: You can both curb inflation and spark expansion. Mr. Reagan was fond of saying that an economist is someone who watches a policy succeed in practice but wonders whether it will succeed in theory. But the profession is catching up with supply-side economics. I was in Stockholm in 1999 to watch Bob Mundell accept the Nobel Prize; in his banquet acceptance he sang a few bars from "My Way."
Over the decade just past, my editorial page made a mark as paper of record on President Clinton's swirling scandals. We've republished our views in six volumes on Whitewater. There's even a CD-ROM. Like everything else in my world, this started back in 1972. On June 17, to be precise, when D.C. police apprehended five burglars attempting to plant microphones at the Democratic National Committee offices in the Watergate. In Clinton's Whitewater we see Nixon's Watergate, history repeating itself as farce.
Watergate was a huge legal, political and constitutional crisis, and I was confronting it as a 30-something editor only a year on the job. My feeling was that Nixon's critics were probably right, but they should be forced to make the case. Our role was to mark the denouement.
I was also taking guidance from one of the most remarkable men I've ever met, Yale law professor Alexander Bickel, who was dying of cancer. When asked how he was doing, he'd answer cheerily, "The voice is still good." His preoccupation was the powers of the presidency. Nixon had the power to fire cabinet officers, even in the Saturday night massacre. "Nixon won't do the truly audacious thing, like burn the tapes," he told me. These trains of thought explain why the Journal opposed the independent counsel law that resulted from Watergate as an intrusion on executive powers. I'm glad to note that with Whitewater, Democrats and liberals have come to see the wisdom of our arguments.
Yet it's also true that if President Clinton accomplished nothing else, he proved that the executive remains a huge font of power. He succeeded in mounting a political offensive against the independent counsel, who had no way to respond. A House controlled by the opposition party voted a bill of impeachment, but the Senate never conducted a serious trial. President Clinton's sin was the same as President Nixon's: not the burglary but the lies, not the sex but the lies. In Watergate, I wrote that Nixon had lost the credibility necessary to govern; in the end he had the residual decency to resign.
The success of President Clinton in withstanding the assault that toppled Nixon is only partly a result of his charm, and only partly the result of a liberal tilt in the press. To bring the strands of my story together, Watergate was an artifact of Vietnam. Without the public passion aroused by the war, judges and journalists and opposition politicians would never have had the stomach to unseat a sitting president. In normal times, this is not something the electorate would allow. The electorate takes the optimistic view.
My experience leads me to doubt that private personality quirks are irrelevant to public office. Nixon wasn't sexually promiscuous, but his manipulative side led to his troubles. The fecklessness about sex that Mr. Clinton displayed repeated itself in foreign policy, and we're still paying the price. The more we learn about JFK, the more grounds we have to suspect that his martyrdom obscured the price we paid for his presidency. A failure of moral character opened our agony in Vietnam. When he sanctioned a coup against an ally and Ngo Dinh Diem was murdered, we could no longer walk away. As the depth of this mistake became apparent, the Kennedy coterie turned against the war and ultimately against American society. The Vietnam era was not wiped away until Sept. 11, 2001. When the attack produced no yellow ribbons but a spontaneous display of American flags, the Vietnam syndrome was extinguished.
In 1990, partly because I felt no one was listening to what I had to say, I decided to take a break from editorializing to write my book. But I came back to write three editorials. One was on legal issues, dissenting from the scapegoating of Michael Milken. Since neither Jack Welch nor Martha Stewart has yet been indicted, we may make it through the current recession without a legal assault on relatively innocent bystanders.
The second editorial concerned economics, and said, "The economic ideas expounded in these columns have shared the blame, and sometimes even the credit, for the economy of the 1980s." But with tax increases to curb the deficit, "the Bush administration has joined the Democrats in endorsing quite another set of ideas. It appears that the economy of the 1990s is likely to belong to someone else. Good luck." The second Bush administration hasn't fully digested this experience. I suspect it is about to.
The third editorial, in 1991, was entitled "An Elbe in the Desert," recalling Churchill's efforts to keep the Americans from stopping at the Elbe during World War II. I predicted that the ground offensive in Iraq would go smoothly, but worried that "as the likely battle develops, we would hope that the offensive would not stop at some Elbe in the desert simply because that fulfills the immediate military mission. The first political goal is to remove Saddam from military command and political power." This lesson has been digested. The current Bush administration has closed the era of arms control as the center of our foreign policy. With the new tag line of "regime change," it is intent on ousting Saddam. But its ambitions don't end there. For all its hesitancy about nation-building, it intends to build at least a proto-democratic regime. Nothing could do more to change the face of the Middle East. Watching this foreign-policy activism, I look forward to the U.S. constructing a new, and ultimately more serious, world order.
Don't wish for the good old days. In 1972, problems were worse. We did overcome communism, stagflation, Watergate and Vietnam. For all our momentary problems, at the turn of the century the Soviet empire had collapsed, democracy was spreading to unlikely places, and the American free-enterprise model was established as the route to development. Even with today's problems the U.S. has no serious rival. In the sweep of this history, today's problems loom as another set of momentary nuisances. What I think I've learned over 30 years is that in this society, rationality wins out, progress happens, and problems have solutions. This, I like to think, is what happens when a society incorporates the editorial credo of my newspaper, free markets and free people. In that kind of a society, optimism pays.
Mr. Bartley, editor of The Wall Street Journal, will become editor emeritus on Jan. 1. He will continue to write his column, "Thinking Things Over." This is an excerpt from his valedictory address, delivered last night in New York.
