The Complete Idiot's Guide to the Vietnam War by Timothy P. Maga Ph.D

Author:Timothy P. Maga, Ph.D.
Language: eng
Format: epub
Publisher: DK Publishing
Published: 2010-07-06T04:00:00+00:00

SHOCK AND AWE

As early as 1965, economic policy expert Anthony Solomon, along with Harvard University School of Business, sponsored a special seminar on financing the Vietnam War. Their recommendations for “commonsense economics” were ignored by the White House.

The key to Johnson’s financial optimism was the fact that war usually helps a domestic economy. You didn’t need a Ph.D. in economics to conclude that World War II had put a swift end to what was left of the Great Depression. In the 1950s, the Cold War had led to such a boom in industrial defense contracting that Eisenhower mentioned it in his farewell address. Organized labor certainly had no problem working round-the-clock to pump out military hardware for the Vietnam War, and former Ford boss Robert McNamara told Johnson that his CEO colleagues throughout American business welcomed the new contracting boost.

But the expense of Vietnam was embarrassingly high. U.S. Air Force operations over secondary targets in South Vietnam cost as much in 1965 as the entire air war in the Pacific had cost during World War II. To make matters worse, nobody really knew how much had been spent in aerial operations over primary targets in North Vietnam.

The reason for the lax bookkeeping was the Tonkin Gulf Resolution. McNamara’s Defense Department interpreted that document as a blank check for deficit spending, and the money poured into Vietnam accordingly. The irony was that McNamara had built a reputation for counting pennies. Naturally he worried that the bill was getting out of hand, and he told Johnson so. A major Vietnam casualty, he predicted, could be the value of the U.S. dollar and the stability of the U.S. economy itself. But McNamara was more the enforcer of policy, and his financial concerns were dismissed by Johnson.

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