15

On the New Frontier

Dear Mr. President,

In an early two-volume work I intend to deal with the relation of a President to economists. I will naturally urge that he listen to them attentively, and indeed with a certain respect and awe. But I will also urge that the political winds in the willows are a safer guide to final action than the most enlightened conclusions of my craft. This is because the President (after all he got elected) must have a sense of what the people want. This is the best guide to action. Economists only know what they should want or, sometimes, what they used to want.

—Galbraith to President Kennedy, August 1962

JANUARY 20, 1961: On the Friday morning of John F. Kennedy’s inaugural, the weather in Washington seemed anything but welcoming to the new President. A bitter cold front had enveloped the city, and on Thursday snow began to fall. By evening, ice had encrusted the inaugural stand on the east steps of the Capitol. Soldiers were dispatched just before midnight; when chipping and digging failed, they were ordered to use flamethrowers to melt the ice. The searing flames did their job but in the night’s howling wind left unseen damage. At noon on Friday, as Richard Cardinal Cushing concluded his lengthy invocation,* a thin trail of smoke began to rise from the base of the podium. Secret Service agents rushed beneath the platform, and the chief agent contemplated clearing the stands. Quickly determining that some electrical circuits had been damaged by the flamethrowers’ intense heat, agents contained the problem, and the inauguration proceeded.

Shortly before one o’clock, Chief Justice Earl Warren finished administering the oath, and President Kennedy turned to the audience. Hatless and coatless, his breath frosting in the air, the young President solemnly began, “Let the word go forth from this time and place, to friend and foe alike, that the torch has been passed to a new generation of Americans … tempered by war, disciplined by a hard and bitter peace, proud of our ancient heritage.” In the next few moments, the course of American history changed, and listeners across the country knew it at once. The elegance and panache of the speech and the speaker seemed to electrify Americans as no one had since Roosevelt. “Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and success of liberty,” he declared to ringing applause. When he finished with his concluding injunction—“My fellow Americans, ask not what your country can do for you; ask what you can do for your country”—the ovation was tumultuous.

Wily old Sam Rayburn was as shrewd a judge of politics and character as any man in Washington. “That speech he made out there,” the House Speaker said shortly afterward, “was better than Lincoln.” (This was a sharp revision of his earlier views. In 1956, he’d called Kennedy “a little piss ant.”) Having been elected by only a hair’s breadth, the country’s new leader found his popularity soaring after his inaugural.1

Seated near the podium with John and Elaine Steinbeck, Ken and Kitty Galbraith joined in the applause after Kennedy’s speech, then—in a limousine provided by a network television crew that was making a documentary of the inaugural as seen in part through Galbraith’s eyes—made their way up Pennsylvania Avenue.* The crowds were so thick that it took the limousine more than an hour to get to their VIP seats in front of the White House, and so they missed the start of the parade. In any event, none of the floats, drum majorettes, or marching units of National Guardsmen and police “could take my mind off the bitter cold,” Galbraith remembered. The frozen Galbraiths discreetly abandoned the public festivities in favor of drinks at the home of George Ball, with whom they were staying.

Suitably warmed after an hour or so, they bundled up and made their way through a procession of private parties until around eleven in the evening, when they set off for the Inaugural Ball at the Armory. Traffic was as snarled as ever, though, and they abandoned their car to walk the last blocks in the cold. Once inside, the cameras of the TV documentary crew still in tow guaranteed them instant attention. Dancing and talking until 4 a.m., they had a “splendid time of it,” with McGeorge Bundy urging Galbraith to take the Indian ambassadorship, which Galbraith had asked for but about which he now had second thoughts. Kennedy needed him, Bundy said, and there was much to be done.2

Galbraith knew that Harvard’s rules would allow him only two years in New Delhi. He briefly toyed with giving up Harvard permanently and even discussed it with President Pusey. (Pusey, not a Galbraith admirer, raised no objection, asking only that he decide quickly so as not to disrupt spring course schedules.*) But Bundy and the economist Alexander Gerschenkron talked him out if it.

AS BUNDY SAID, there was indeed a great deal to be done. Kennedy’s inaugural address was preoccupied with the Cold War, national defense, and the threat of international Communism—and didn’t even refer to, let alone outline, a domestic agenda.³ Yet he had promised throughout his campaign to “get the country moving again.” How would this be done? Kennedy placed increased spending on military and space efforts at the top of the list of priorities. Such spending was eventually to account for 75 percent of all expenditure increases during his presidency, and funds for the space program rose from barely $1 billion in 1960 to $6.8 billion in 1964, while military spending in dollar terms rose even faster, from $46 billion to $54 billion.⁴

The boost in military and space spending was all the more remarkable because when Kennedy took office the Department of Defense was already operating 3,500 bases at home and abroad, and U.S. facilities covered 35 million acres (greater in area than Massachusetts, Connecticut, New Hampshire, Vermont, Rhode Island, Delaware, New Jersey, and Maryland combined). From its “missile gap” deficit at the time of Sputnik’s launch, the country’s nuclear arsenal had moreover grown to include 100 ICBMs and IRBMs, 80 submarine-based Polaris missiles, 1,700 intercontinental bombers, 300 carrier-borne aircraft, and almost 1,000 land-based supersonic fighters. In addition, the Army had thousands of its own tactical nuclear weapons, and was storing in one base alone enough nerve gas to kill the world’s population several times over.⁵

Yet in Kennedy’s less than three years in office, the number of battle-ready nuclear weapons grew by 100 percent and Polaris-armed submarines by 450 percent; U.S. tactical nuclear forces in Europe jumped 60 percent; and overall combat readiness in the Army rose by 45 percent.⁶ It was, as his aide Theodore Sorensen later proudly wrote, “the largest and swiftest build-up in this country’s peacetime history,” even though much of it was the result of Eisenhower-era weapons systems finally coming on line.7 Simultaneously Kennedy increased spending on many domestic programs: in his first six months alone, Congress approved new temporary unemployment benefits, an area redevelopment program, liberalization of Social Security benefits, aid for dependent children with unemployed fathers, and an omnibus housing bill—all while the country was recovering from another recession. Schlesinger grandly called it “a record of action on the domestic front unmatched in any single sitting since 1935.”

But the dollars for these programs were a fraction of those spent on space and defense. Under Kennedy—as under Eisenhower—defense spending regularly outpaced all spending by state and local governments and was more than twice the magnitude of all federal domestic social expenditures. Meanwhile, Congress rejected many major New Frontier initiatives such as Medicare, aid to education, and a new Department of Urban Affairs. Despite Kennedy’s efforts, the 1961 minimum-wage bill merely enabled workers to catch up with inflation and productivity gains since the last increase five years earlier; it extended coverage to 3 million new workers, but conservatives blocked further extension to the 16 million who were truly impoverished. For the elderly, the average monthly Social Security check was $75, while a day-care bill for 4 million children allocated $5 million—$1.25 per child. Under the Area Redevelopment Act eventually $1 billion was spent over four years on poverty-stricken Appalachia, but 80 percent of that went to road construction. The Pentagon, by contrast, was spending $1 billion a week.⁸

Kennedy, acutely aware of the country’s needs, was especially touched by the plight of the young. According to Schlesinger, the President

knew (and would rattle off the statistics) that each year 4 million boys and girls were born in the United States; that one of three who completed fifth grade would drop out before graduation from high school; that nearly 3 million in their teens would come every year into the labor market; that workers under the age of twenty-five, though less than one fifth of the labor force, were one-third of the unemployed; … that arrests of the young had increased 86 percent in a decade.”⁹

He also grasped the scope of American poverty. Schlesinger credited his having read both The Affluent Society and Michael Harrington’s The Other America, along with Galbraith’s “unremitting guerrilla warfare in support of the public sector,” with eventually convincing him that a major antipoverty program should be launched in 1964.

But at the start of his administration, poverty wasn’t at the forefront of his agenda; getting the country moving again was, and “fiscal policy was the major [economic] weapon of the Kennedy administration,” as Seymour Harris, who served as the Treasury Department’s senior economist, observed. “The rise of spending was crucial, though the increase was only partly connected to economic objectives; the major part of the rise stemmed from increased needs to assure maximum security.”10

Two weeks into office, Kennedy sent a special message to Congress about economic recovery and growth, outlining his ambitions. Soon after, on hundreds of desks and walls in the Commerce Department, a new sign appeared: “What have you done for Growth today?”¹¹ He also announced the formation of a new Cabinet Committee on Growth, which included the chairman of the Council of Economic Advisors, the head of the Budget Bureau, and the Secretaries of the Treasury, Commerce, and Labor. (The committee’s title tellingly contrasted with Eisenhower’s Cabinet Committee on Price Stability for Economic Growth.)¹²

Walter Heller, the new chairman of the Council of Economic Advisors, began calling the Kennedy policy “the New Economics.” Growth, in his words, would henceforth be “both an end in itself and an instrumentality, both the pot of gold and the rainbow.” As Heller’s CEA colleague James Tobin put it, the Kennedy administration “regarded growth in national production and income not only as an end in itself but as the fount of economic and fiscal resources for meeting national ends” at home and abroad.¹³

As the agenda took shape, confidence abounded that the President and his economic advisers could realize their ambitious goals, and they seemed to reflect a fresh mood sweeping the country at large. To the journalist Theodore White, Kennedy and his men were part of “a new generation of Americans who saw the world differently from their fathers. [They were] brought up to believe, either at home or abroad, that whatever Americans wished to make happen, would happen.”¹⁴ And the heady confidence of Kennedy’s economists soon seemed justified. By March the U.S. GNP began an expansion that eventually lasted 106 months, an achievement without precedent in the nation’s history. Between 1961 and 1966 alone, one economic policy historian has noted,

real GNP increased at a rate above 5 percent per year. Employment grew by 2.5 percent per year, and in January 1966 the unemployment rate sank to 3.9 percent. The percentage of Americans mired in poverty, according to official estimates, dropped from 22.4 percent in 1960 to 14.7 percent in 1966. As these advances unfolded, the rate of inflation remained below 2 percent per year through 1965. By all the usual measures, the economic policies of the early 1960s were an unambiguous success.¹⁵

Little wonder that New Frontier economists came to believe that their “New Economics” was ushering in a “Golden Age of Keynes”—and weren’t alone in their praise. Time in 1965 put Keynes on its cover. “Today, some 20 years after his death,” it declared, “his theories are a prime influence on the world’s free economies, especially on America’s.” In Washington, “the men who formulate the nation’s economic polices have used Keynesian principles not only to avoid the violent cycles of prewar days but to produce a phenomenal economic growth and to achieve remarkably stable prices.” Even the monetarist Milton Friedman ruefully admitted, “We are all Keynesians now.”16

Just how successful, in fact, was the New Economics, and what relation did Galbraith have to it?

Although Heller’s term suggests a coherent whole, the New Economics was in practice a loosely coherent mosaic of policies. To begin with, its advocates were advancing activist management theories that had not been significantly tested. American economic policies in the 1950s had been nominally “Keynesian” by virtue of the government’s sheer size, and by its efforts to “manage” the business cycle by following at best a cautiously conservative interpretation of Keynesian principles. Now, as Heller explained, there was meant to be a dramatic policy reorientation: “Gone is the countercyclical syndrome of the 1950s. Policy now centers on gap closing and growth, on realizing and enlarging the nation’s non-inflationary potential.”¹⁷

But Heller couldn’t have foreseen that he and the administration’s other mainstream Keynesians, centered in the CEA, were to spend a great deal of time struggling with non-Keynesians in the Treasury, Federal Reserve, and Congress. Kennedy himself wasn’t fully won over to Keynesianism for quite a while. Prospects and Policies for the 1961 American Economy, a special report written for him by Paul Samuelson and others in December 1960, set forth these theories, but Kennedy hesitated to follow its recommendations.

Most important from Galbraith’s perspective, the “New Economics” maintained a discreet silence on the armed forces’ immense significance in the federal budget. Not giving more than passing mention to the Pentagon, instead the CEA’s annual Economic Reports focused either on broad macroeconomic growth, or on specific domestic issues, or on gold and the balance of payments. (Samuelson’s December 1960 report had observed that defense dollars were in a category all their own, and should be determined “on their own merits. They are not to be the football of economics stabilization.”¹⁸)

In their awkward silence, the New Economists reflected long-standing professional habit: America’s Cold War consensus included most economists, after all. But consensus wasn’t the only reason that U.S. military spending escaped rigorous scrutiny among those who valued their commitment to searching reason. The dark consequences of McCarthyism had reached deep into American academic life and exacted a certain discreet silence. The pioneering economic forecaster Lawrence Klein had faced repeated problems finding and keeping a teaching job because he’d briefly joined the Communist Party in college; Franco Modigliani, Don Patinkin, and Leo Hurwicz had all left teaching positions thanks to political harassment; Tjalling Koopmans, after brilliant wartime service, had been constantly scrutinized and criticized.

For others, the merits of self-censorship had become obvious. Kenneth Arrow, who’d been a Norman Thomas-style democratic socialist in college, in the 1950s “largely abstained from contemporary political involvements.”¹⁹ Herbert Simon found harassment the norm even then, and for years later, Samuelson recalled being acutely aware that “if you were a teacher at many a school around the country and the Board of Regents of your university was on your neck for using subversive textbooks, it was no laughing matter.” After a young William F. Buckley savaged him in God and Man at Yale, he carefully reworked his popular Economics college text more than once:

My last wish was to have an intransigent formulation that would be read by no one … As a result I followed an Aesopian policy of paying careful attention to every criticism of every line and word of my text … In a sense this careful wording achieved its purpose: at least some of my critics were reduced to complaining that I played peek-a-boo with the reader and didn’t come out and declare my true meaning … I reread today, say the fifth edition of the book, with a certain irritation for the care with which many matters are formulated.20

Samuelson’s textbook contained no more than a few words on American defense spending, and none on its size in relation to the federal budget or its effect on the economy. In this it was not alone: all the major economics textbooks did the same.²¹

Apart from the price they paid in analytic clarity and intellectual integrity, economists’ decision to downplay or even ignore the size and effect of America’s military budget came to have fateful consequences for Keynesian policy in the United States. And this was not a problem to which Galbraith had ever been blind or about which he now kept silent. Once Kennedy took office, he raised these concerns to a new level almost immediately. Military power, military spending, and a reliance on military intervention carried a terrible cost, he repeatedly warned the President.

And military spending was not the only issue that separated Galbraith from the “New Economics.” Most “New Economists” by 1960 thought they had in hand the tools that would let them steer the economy. Their confidence was built on three cornerstones: an underlying mathematical model of stable growth, a trade-off theory of inflation and unemployment, and their practical index for measuring optimal performance.²² With these three, as Tobin wistfully put it later, “We thought we could not only make the bicycle go faster but keep it at high speed and determine the path it would follow.”²³

The fundamental growth concepts of the “New Economics” owed much to the work of the Oxford economist Roy Harrod, Keynes’s disciple and first biographer, and to the Harvard-trained Evsey Domar, a Russian émigré. The two men by the 1950s had ingeniously connected, through Keynes’s “multiplier effect,” the growth rates of the labor force and of investment in physical plant and equipment to measurably predictable changes in aggregate demand.²⁴ Using a combination of national income accounting definitions, statistical regressions, and algebraic and calculus-based manipulation, the “Harrod-Domar model” seemed to promise a way to calculate, predict, and, most important, manage overall economic growth. But the Harrod-Domar model had problems: among other things, it accounted poorly for technology’s contribution to the productivity of labor and equipment—not a small weakness in modeling a modern economy. However, growth theory was something of a growth industry itself and attracted talented adherents.25 Some thinkers, such as Robert Solow of MIT (who later served with Heller on Kennedy’s Council of Economic Advisors), made brilliant contributions to unraveling the technology mystery, thereby mitigating the original model’s productivity problem.²⁶ Others, such as James Tobin, improved on the original Harrod-Domar model by making labor and capital substitutable in the basic equations, thereby obviating what was called the “knife-edge” problem.²⁷

Difficulties with the model persisted, especially the fact that it couldn’t be made to match empirical data. Rigorous studies by the Joint Economic Committee of Congress and the Committee for Economic Development showed that increases in labor and capital together accounted, as Walter Heller himself admitted, for less than half of economic growth. That left Heller explaining that education accounted for almost all the rest—an analytically indefensible proposition. Still, the “New Economists” confidently assumed the fundamental correctness of their model, and believed they were free to focus on their second cornerstone, the trade-offs between inflation and unemployment that sustaining “managed” full-employment growth would bring.

Empirical work by the New Zealand economist A. W. Phillips, recalculated for the American experience by Samuelson and Solow, was decisive.²⁸ Using data on British economic performance dating back to the 1860s, Phillips had observed an inverse, stable relationship between rates of change in money wages and those in unemployment: rising inflation lowered unemployment and vice versa, with surprising predictability. This “Phillips Curve” was, as Solow put it, “really pretty astonishing.”

Here was evidence for a strong, and apparently reliable, relation … [that] did not appear to be a short-run transient affair as the [pre-Keynesian] macroeconomics of the 19th and early 20th centuries would have suggested … It seemed to say quite clearly that the rate of wage inflation—and, probably, therefore the rate of price inflation—was a smooth function of the tightness of the aggregate economy.

Samuelson asked Solow whether he thought the Phillips Curve meant “the economy can move back and forth along a curve like that,” and Solow answered, “ ‘Yeah, I’m inclined to believe it,’ and Paul said, ‘Me too.’ “²⁹

Since the “New Economists” wanted both rapid and stable managed growth, their implicit policy challenge was to find an economic and political bargain that optimized growth somewhere between a strict “full-employment” goal and a modest rate of inflation. In theoretical terms, this was far more complicated than simply demanding that the American economy grow 5 percent per year, as Rockefeller and Keyserling had; in practical terms, Heller and the CEA set their Phillips Curve “bargain” at 4 percent unemployment and roughly 2 percent inflation.

The third cornerstone for these mathematical Keynesians—the “full-employment budget” concept—was a calculation of a hypothetical GNP level that assumed “full” (in reality, near-full) employment, then a comparison of this to actual economic performance. Keynes had introduced the idea in How to Pay for the War, and his back-of-the-envelope sketch had been greatly refined since then. The gap between the two—expressed in dollars of potential GNP “lost” by slow growth—was assumed to be the “room” that a country still had to grow before accepting fundamental restraints. Filling this gap, or “room,” became the first order of business for Kennedy’s “New Economists.”

Kennedy’s economic advisers were, however, cautious in spelling out their policy applications, at least at first. Sidestepping the 1960 Democratic platform plan calling for 5 percent GNP growth, Kennedy had been deliberately vague during his campaign about any hard targets—not just for tactical political reasons. Galbraith’s and Heller’s skepticism about 5 percent growth had impressed him, and when the President introduced his newly chosen CEA chairman to the press, he carefully told reporters only that he and Heller wanted a “faster” rate of growth, never saying what either of them thought “faster” might actually mean.30

Heller understood that winning JFK to the ideas of the “New Economics” was one of his primary tasks. By all accounts President Kennedy was a conscientious student of economics who occasionally even caught his own senior advisers in misstatements of arcane theory.* And most of the economists who knew and worked with JFK believed that he evolved both intellectually and politically while in the White House. Heller called him “my best student.”³¹ Kennedy’s early behavior in office failed to match his often Keynesian-sounding rhetoric, yet seventeen months later, he seemed a full-fledged and fervent convert.

So why then was Galbraith the Kennedy administration’s most prominent in-house critic of major elements of the “New Economics”? A partial answer can be found in the draft inaugural address Kennedy had asked Schlesinger and him to prepare. In it—roughly following the seven points Galbraith had given the candidate earlier—they laid out a domestic agenda of civil rights and economic opportunity, with expanded public investment in education, health, scientific research, and poverty reduction; internationally, they had Kennedy call for increased cooperation with allies, withdrawal of support for anti-Communist dictators, a major new partnership with Latin America, and heavily increased development aid for the Third World. Communism was to be confronted, but wherever possible peacefully—and containing the dangers of war was paramount.32 But Kennedy and Sorensen had used almost none of this, eschewing mention of the domestic agenda and opting for the eloquent rhetorical challenge, simultaneously martial and peace-seeking, to restore America’s greatness in the world.

Galbraith thought the final version brilliant, and brilliantly delivered. Yet its unspoken omissions underscored Kennedy’s public caution, and he resolved to intensify his own education of the President. The most important of Galbraith’s surviving contributions to the inaugural address was the line “Let us never negotiate out of fear, but let us never fear to negotiate.”³³ His motives for writing such lines—and longer passages on the possibilities for mutual disarmament—reflected his well-formed worldview and his concern about the price the United States was paying for the Cold War.

Just before Kennedy’s inauguration President Eisenhower had used his farewell address to the Congress to speak with remarkable candor of his concerns about the Cold War’s enormous costs, warning Americans about the growing dangers of what he called the nation’s “military-industrial complex.”³⁴ Here, he said, were the Cold War’s real and chief beneficiaries—and somehow they must be contained. To Galbraith this was no small irony: during Eisenhower’s eight years in office, the United States had spent more on its armed forces than it had under Roosevelt to win World War II. Still, Eisenhower’s speech had seemed wonderfully timed, and Galbraith had hoped the incoming Democratic administration would use it as a bipartisan foil to set new priorities. Kennedy, he felt, had to confront and contain the de facto “military Keynesianism” of his predecessors. If he managed to do so, he would make his administration as vitally important as the New Deal.

Getting economic policy “right” in a technical sense was only one contingent part of the challenge; finding the men who understood the problem was the real crux. Immediately after the November elections, Kennedy had assigned Galbraith, Arthur Schlesinger, and his own brother-in-law Sargent Shriver the job of recommending and vetting candidates for the incoming administration’s top economic posts—the Treasury, the Budget Bureau, the Council of Economic Advisors, and so on.

For the chairmanship of the Council of Economic Advisors, Kennedy’s first choice was probably Paul Samuelson, but Samuelson had always declined to live in Washington, and told the President that he would still decline.³⁵ Kennedy then thought of appointing Galbraith, and a few days after the election, had Schlesinger inquire whether he was interested. Yet no doubt also anxious about the reactions he’d have to face if he were to appoint his highly visible and controversial friend to the post, Kennedy “seemed far from distressed,” according to Schlesinger, when told that Galbraith’s answer was no.

Despite the job’s obvious temptations, Galbraith declined because he still vividly remembered the trials and frustrations of both his OPA and State Department service in the 1940s. “I was little enchanted,” he later recalled, “by the thought of doing with slight authority what I’d done twenty years earlier. And equally I didn’t wish to come every day to the same discussion of the same questions around the same oak table, mostly with the same people, not all of whom I wished to see.”36 For the CEA job he suggested Heller.

Galbraith’s first choice wasn’t the ambassadorship in New Delhi, though; his real hope was that Kennedy would arrange his appointment to the President-elect’s now vacant Senate seat. Trial balloons suggesting the idea had appeared in the Boston papers and then in The New York Times right after the election (Galbraith has always insisted he wasn’t the source for them).³⁷ But reaction to them made him quickly realize that JFK had another candidate in mind: his younger brother Robert. Then, under intense pressure from their father, he appointed Bobby as Attorney General, which left the still younger brother Edward as the designee. But Ted’s youth (at twenty-eight) stood in the way of his appointment (the Constitution set thirty as the minimum age for a U.S. senator), and so Ben Smith, an old family friend, was tapped as the seat’s place holder until the President’s youngest brother became old enough to run in 1962.³⁸

In New Delhi, Galbraith would of course be far away from Washington, but the President himself made quite clear that the distance was to be geographic only; he instructed his ambassador-designate to maintain frequent and broad-ranging contact on whatever economic, political, and diplomatic issues he might select. And whenever Galbraith so chose, the President added, the State Department’s official channels to the White House should be ignored. This gave Galbraith a unique position. Encouraged by Secretary of State Dean Rusk, Kennedy formally ordered all U.S. ambassadors to channel their reports through State. According to Schlesinger, “Only Kenneth Galbraith ignored this injunction (and Kennedy was delighted that he did).” JFK wanted to hear from him directly and regularly, and to see him frequently in Washington. Until Galbraith left for India, he said, he wanted Galbraith nearby.³⁹

BY CHRISTMAS 1960, Kennedy had already decided that it was politically advisable to reach out to moderate Republicans on economic policy. He teased his ambassador-designate that he was glad Galbraith was going to India, because “otherwise you and Heller would have me expounding a far too radical position. My policy is to be moderate and do much.”⁴⁰ And contrary to Galbraith’s advice, he chose the Wall Street investment banker C. Douglas Dillon as his Treasury Secretary and the New York Federal Reserve vice president Robert Roosa as Dillon’s deputy. (Galbraith had favored a respected senior Democratic senator such as Paul Douglas of Illinois, himself a distinguished liberal economist, or Albert Gore, Sr., of Tennessee, or the Democratic congressmen Richard Bolling and Henry Reuss. Dillon had been Dulles’s Undersecretary of State and a major Nixon donor.⁴¹)

The consequences of choosing Dillon showed themselves immediately after the inauguration. When Kennedy, at his first cabinet meeting, asked everyone to explain briefly the most important issue each was facing, Dillon replied—in sweeping affirmation of the Wall Street worldview—that America’s balance-of-payments deficit was “the nexus of all economic problems, at home and abroad.”42 He, along with Roosa and the Federal Reserve Board chairman, William McChesney Martin, lost no time in warning of the grave and extensive “dangers” posed by America’s international economic situation.⁴³ Just as unsurprisingly, these men cast the problem in technical terms, requiring technically administered solutions that ignored or narrowly defined the overt political goals or the political implications for the administration’s domestic aims and its supporters. In “Operation Twist,” the two agencies cooperated to lower long-term interest rates while keeping short-term rates high, and to enact a string of related policies meant to deal with “the nexus of all problems” (the manipulation of the London Gold Pool and the Interest Equalization Tax, among others).

Right away Galbraith warned Kennedy that “Operation Twist” wouldn’t work. “I know all about the gold outflow and I’m not ignoring it,” he said, but Operation Twist was “mystic claptrap” and a “half-assed effort.” His recommendation was to induce European central banks to lower their rates while the United States got its economy moving. This, he said, “will be called impossible or unwise” by those who profited from the high rates. “Meanwhile, the economy suffers and so do the people and so, potentially does this Administration.” In office only a month, however, Kennedy wasn’t willing to stymie his new Treasury Secretary, and Operation Twist continued. Soon enough Galbraith was proved right.⁴⁴ But the policies were swallowed without much resistance at the CEA, despite Keynes’s well-known contempt for the gold standard and for letting international economic relations determine domestic economic policy. Heller and the others understood they were making a devil’s bargain.⁴⁵ As Heller later put it, “One couldn’t do as much as one might like to have done to stimulate the economy … because short-term interest rates had to be held up to keep money from flowing overseas. To stimulate the economy, you just had to do it by fiscal policy, and tax cuts were the only promising path in Congress.”⁴⁶

Even Paul Samuelson argued that the country’s gold outflow “without question” had to “affect our choice among activist policies to restore production and employment.” He urged the CEA to identify employment-generating policies with the least effect on the balance of payments—a quest, as one economist later put it, that was like “looking for needles in the proverbial haystack.”⁴⁷ But Galbraith kept pressing Kennedy to resist these directions.

As an alternative, he gave Kennedy a list of wide-ranging recommendations for measures meant to solve what he considered a relatively small problem. Foreign aid, for example, could be tied to the recipients’ purchase of U.S. goods and services; Americans could be gently encouraged to buy American (though the government should avoid “jingoistic appeals”); a wealth surtax could be placed on rich American expatriates; an increased duty should be imposed on tourist purchases brought home.

In January, Kennedy put Galbraith in charge of drafting the economics section of the State of the Union message, as well as a separate special message to Congress on the balance of payments. After sharp debates with Dillon, Heller, and others, Galbraith thought he had prevailed on the gold issue and several others. And of the speech as the President delivered it, he wrote,

From any point of view, I don’t think it could be better. The economic sections are excellent and do not spare the Eisenhower Administration in their review of unemployment, declining product, business failures, farm income and continuing price advance. The affirmative part portends good legislation, even if some is yet to be devised or thought out … My views on foreign aid and development, perhaps not unnaturally, are strongly articulated.48

But, Galbraith noted in his diary, apart from the President, the new administration might “be too professional—too aware of criticism, too sensitive to what cannot be done. There are no political buccaneers with a fine enthusiasm for action—in the manner of Harold Ickes or Hugh Johnson. The [State of the Union]—or a late draft—has a passage calling for some spirit of adventure in the public servant. It could be addressed to the Cabinet.”⁴⁹

Galbraith himself never flinched from advising on controversial issues, and he repeated the worries he put in his diary directly to Kennedy. He was himself, perhaps, the kind of “political buccaneer” he recommended President Kennedy favor. The President should rigorously evaluate the economic cost of troop deployments abroad, he said, and be prepared to cut back bases and troops; he should just as rigorously review American military and economic support for certain foreign governments such as those of South Korea and Taiwan.⁵⁰

Galbraith also thought the President should consider establishing capital controls of some sort on any large movements of private U.S. funds abroad. (He returned to this issue repeatedly; it was the subject of his last letter to Kennedy, written a week before the President’s assassination.⁵¹) He also urged him to use American power to advance fundamental economic reform in the Third World, not just in the interests of justice, but to strengthen the U.S. economy. In 1962, he was to write, “In Latin America, it is land reform, above all, that the people want. Those who own the land have already been paid for it a thousand times. In the absence of reform our aid does not help the people or even much postpone revolution. Rather it buys the way temporarily around the crisis in the process of which dollars are funneled into Rio and squirreled out to Paris.”⁵²

Until he left for India in early April, Galbraith was given Secretary of State Cordell Hull’s spacious old office in the Executive Office Building next to the White House, whence he could be easily called to the Oval Office or to the upstairs family quarters, as he repeatedly was. And Kennedy made sure that Galbraith attended virtually all of the crucial first meetings at which the administration’s economic policies were formulated. JFK’s instructions were clear: Galbraith’s job was to “tell me not what I should do but what I should tell others to do—and be specific.”⁵³ For three months Galbraith thus met frequently with the President one-on-one as well as with Heller, Treasury Secretary Dillon, and Federal Reserve Chairman Martin and their deputies to discuss and debate issues from tax cutting and domestic spending priorities to foreign aid and balance-of-payments problems, and he was called upon repeatedly to draft speeches and papers.54

These economic policy duties were only one part of his exhausting schedule; by late February, more and more of Galbraith’s time was being taken up in State Department and CIA meetings, plowing through the thick briefing books meant to prepare him for his Senate confirmation hearings in March. It was frustrating work—his dislike of the State Department hadn’t lessened over the years and was exacerbated by his newfound dislike of Dean Rusk, who seemed only a modest improvement over John Foster Dulles. The bad feelings between him and Rusk probably started in early January, after Galbraith sent Rusk a polite note suggesting that Rusk might want to inform the current Indian ambassador, Ellsworth Bunker, of his impending India posting. Rusk sent back a stiffly worded note on protocol, advising Galbraith to talk less about this possibility. But personal feelings aside, they disagreed on fundamental policy on India and Pakistan, on the U.S.S.R. and China, and on Vietnam.⁵⁵ At one point Galbraith even drafted a letter offering to remove his name from consideration for the post in New Delhi, but was talked out of it by McGeorge Bundy.

President Kennedy, like Roosevelt, wasn’t keen on the State Department, and he had appointed Rusk, whom he didn’t know, because he came highly recommended by Robert Lovett, who’d overseen Rusk’s presidency of the Rockefeller Foundation as a board member. Lovett assured Kennedy that Rusk would not make policy on his own and would faithfully follow the President’s lead. But in the President’s private letters to his new ambassador in India, he repeatedly made his distress over Foggy Bottom clear, and he was delighted when Galbraith observed to him that it was a good thing they were writing to each other directly, because trying to communicate through the State Department was “like trying to fornicate through a mattress.”

At the Senate hearings, Galbraith almost lost the posting when a conservative Republican senator interrogated him about China. “The shit hit the fan,” he wrote later, when he mildly suggested that the United States might well consider diplomatically recognizing China, once its government accepted the right of Taiwan to exist independently. In the 1960s, for many on the right wing this was an admission of virtual treason, and it earned Galbraith front-page coverage the next morning. With some difficulty senior Democratic senators on the committee, unwilling to embarrass President Kennedy by rejecting his nominee, were able to salvage the appointment.⁵⁶

AMBASSADOR GALBRAITH AND his wife stepped off a plane at New Delhi’s Palam Airport on the evening of April 8, 1961. That same day, in a secret jungle camp in sweltering eastern Guatemala, 1,400 heavily armed Cuban exiles in camouflage fatigues gathered for what their CIA trainers said was an important announcement. In forty-eight hours, the advisers told them, they would begin moving to ships waiting on Nicaragua’s Caribbean coast, the first step in what would be “a great, heroic struggle.” This was the moment the exiles had waited, prayed, and trained for: “Operation Zapata,” their invasion of Cuba, was about to begin. For the first time, some of the men were now also told they would land at a remote spot on Cuba’s southern coast known as the Bay of Pigs.

A few of them, hearing of the location, were alarmed. The Bay of Pigs, they knew, was backed by a great, marshy swamp, terrible fighting terrain in the best of circumstances. They swallowed their doubts, though, when the Americans told them that top specialists in the CIA and Pentagon had chosen the spot and planned every detail of the invasion. Moreover, U.S. bombers and fighter jets would be overhead as they landed, with President Kennedy’s personal blessings, and 10,000 to 15,000 crack U.S. troops would follow in a second wave, if needed.

Yet the Americans confidently said they were counting on the Cubans alone to do the job. “You will be strong, you will be getting so many people to your side that you won’t have to wait for us,” CIA agent Frank Bender told them. “You will go straight ahead. You will put your hands out, turn left, and go straight into Havana.” The Nicaraguan dictator Luis Somoza was equally confident. When the Cubans shipped out several days later, he came to the docks. “Bring me a couple hairs from Castro’s beard,” he said.57

They didn’t, of course.

Under withering fire, most of the invasion force nine days later never got past the beaches at the Bay of Pigs, and Fidel Castro’s well-disciplined troops quickly rounded up the few who made it into the swamps. Cubans never rose up to greet the exiles as the CIA had promised, and the American planes meant to support the invasion never took off—on Kennedy’s direct order. On the ground, the invasion of Cuba was a fiasco; it was no less so in Washington.

From New Delhi, Galbraith watched in horror as the disaster unfolded: here was exactly the sort of foreign misadventure that could derail Kennedy’s presidency. President Truman had been led into a deeper and costlier war in Korea in 1950 by advisers who persuaded him to let General Douglas MacArthur advance U.N. troops to the Yalu River. It was a “mopping up” operation in a war then nearly over, he was told, but instead it brought a million Chinese soldiers streaming across the China-Korea border, prolonged the war for three more years, and ultimately cost Truman any chance of reelection. In 1960, President Eisenhower had similarly listened to advisers, chief among them the CIA chief, Allen Dulles, who’d convinced him to permit a U-2 spy plane to fly over Russia just weeks before a major U.S.-Soviet summit meeting in Paris, at which Eisenhower had hoped to cap his presidency by convincing Nikita Khrushchev to embrace a major reduction in the arms race between the U.S. and the U.S.S.R.

The scale of the Bay of Pigs disaster shocked Galbraith, but he had known about the proposed Cuban invasion before he left Washington. His old friend Chester Bowles, now Undersecretary of State but not a key decision maker in the Cuban plan, had told him about it. Deeply alarmed, Galbraith had immediately written to the President on April 3, warning him of the risks and recalling what had happened to both Truman and Eisenhower—though without mentioning Cuba by name in order not to compromise Bowles.58 Senator J. William Fulbright had also given Kennedy arguments against invasion. In a March 23 memo, he wrote bluntly, “To give this activity even covert support is of a piece with the hypocrisy and cynicism for which the United States is constantly denouncing the Soviet Union in the United Nations and elsewhere. This point will not be lost on the rest of the world—nor on our own consciences.” But the die was cast, and JFK didn’t reply to Galbraith.

On April 4, however, when Kennedy met with Rusk, Robert McNamara, and the Joint Chiefs of Staff to finalize plans for the operation, the warnings must have been on his mind, because he unexpectedly invited Senator Fulbright to join the top-secret meeting. The senator delivered a blistering critique of the invasion plans, as Kennedy knew he would. According to Schlesinger, “Speaking in an emphatic and incredulous way, Fulbright denounced the whole idea. The operation, he said, was wildly out of proportion to the threat. It would compromise our moral position in the world and make it impossible for us to protest treaty violations by the Communists. He gave a brave, old-fashioned American speech, honorable, sensible and strong; and he left everyone in the room, except me and perhaps the President, wholly unmoved.”

The President then asked whether, rather than invasion, infiltration of smaller groups of guerrillas might be a better alternative, clearly testing the waters. But the others reaffirmed their support for invasion. Despite his advisers’ agreement, Kennedy said he wanted to give matters further thought before giving his final authorization. After Kennedy adjourned the meeting, he called Arthur Schlesinger aside to ask his off-the-record opinion; Schlesinger told him that he, too, was now opposed to invasion, especially after hearing Fulbright. The President nodded once or twice but said little.

Early the next morning, Schlesinger hastily prepared a memo arguing for continued support of anti-Castro operations but against invasion, and carried it by hand into the Oval Office. A tired-looking Kennedy pored over the document intently, then looked up and said, “You know, I’ve reserved the right to stop this thing up to 24 hours before the landing. In the meantime, I’m trying to make some sense out of it. We’ll just have to see.” But Schlesinger thought the young President was by then a prisoner of events and of the advice he was getting.

The advocates of the adventure had a rhetorical advantage. They could strike virile poses and talk of tangible things—fire power, air strikes, landing craft and so on. To oppose the plan, one had to invoke intangibles—the moral position of the United States, the reputation of the President, the response of the United Nations, world public opinion’ and other such odious concepts … I could not help feeling that the desire to prove to the CIA and the Joint Chiefs that they were not soft-handed idealists but were really tough guys, too [influenced Kennedy’s key advisers].59

Three weeks later, with the disaster evident to all, Galbraith in New Delhi was furious with himself for not having pressed harder—and pledged that in India at least he would curtail or end CIA covert operations. He could not wholly succeed, but they were cut back during his time in New Delhi.⁶⁰

It took Galbraith only days to realize that although nonaligned India posed a real challenge to American foreign policy, Southeast Asia was a matter of urgent danger. He had never been to Southeast Asia and until then, like most Americans, had paid little attention to it. But India was at that point chairing the International Control Commission, a three-nation body (Canada and Poland were the other two members) that supervised the shaky armistice in Laos, which had been torn by a long-running civil war. Galbraith was supposed to keep a close watch over the ICC—and thus Laos—for the State Department. Indeed, JFK had specifically ordered Galbraith to leave early for India in anticipation of this Laotian crisis.⁶¹

Laos at that point barely qualified as a nation—it was more like a collection of loose tribal alliances held together by a king whose sovereignty was sketchy at best. Most Americans knew little about it or about the fighting that had been going on there for years, nor did they know much more about the two larger nations adjoining its eastern border, North and South Vietnam, still embroiled in a related conflict.

Laos, the two Vietnams, and Cambodia had once made up French Indochina, a nineteenth-century colonial construct of rubber, rice, and hardwood plantations that had collapsed in 1954 with the defeat of the French army at Dien Bien Phu at the hands of Communist nationalist insurgent forces. Few Americans knew that the U.S. government had been involved in Indochina since 1946, when President Truman agreed to let France use surplus U.S. guns, planes, and ships to restore its control there after Japan surrendered. Equally few realized that in the year leading up to France’s 1954 surrender, Eisenhower had provided nearly $1 billion to Paris to prevent French defeat—or that the Joint Chiefs had seriously proposed using nuclear weapons to stop the Vietnamese rebels (Eisenhower had vetoed the proposal, fearing a second war with China just months after the Korean armistice).⁶²

Having visited Indochina as a congressman in 1951 when the area was filled with an immense deployment of French troops, Kennedy had been an early critic of French policy there. After the Geneva peace accords of 1954, Washington took over Western “responsibility” for Indochina when France withdrew, but it quickly found it was having no luck in bringing peace to the region. Believing that the North Vietnamese leader, Ho Chi Minh, was a puppet of the Soviet Union—as they mistakenly imagined Mao Tse-tung was in China—the Americans began to violate the peace agreement by installing and paying for a separate anti-Communist regime based in Saigon, by blocking reunification of the two Vietnams, and by arming both South Vietnam and Laos. Despite this, Ho Chi Minh’s forces kept advancing, and now they were Kennedy’s problem.

Poring through diplomatic and intelligence reports on Laos, Galbraith in New Delhi swiftly grasped that the risks of misadventure there went far beyond what had just happened in Cuba. Three weeks after the failed Cuban invasion, he sent JFK a private back-channel letter in which he realistically admitted that Laos was in danger of “failing to Communism” just as Cuba had “fallen” to Castro two years earlier. This time JFK should not so quickly let advisers persuade him that America could easily use force to change the situation.

Laos, Galbraith observed acutely, was “a jungle regime” where The writ of government runs only as far as the airport,” and it was “going to be a hideous problem for us in the months ahead.”

The rulers do not control or particularly influence their own people; and they neither have nor warrant their people’s support. As a military ally the entire Laos nation is clearly inferior to a battalion of conscientious objectors from World War I. We get nothing from their support and I must say I wonder what the Communists get.

What then did Galbraith recommend that the President do?

One answer, no doubt, is that the Communists will do a better job of organizing existing leaders out. Nevertheless I am convinced that in these primitive countries we cannot always back winners and we cannot be sure that the winners we back will stay on our side. For the same reason we should never assume that anyone is lost to the Communists.

We must above all face the probability of gains and losses and certainly no single loss will be decisive. Most of all we must not allow ourselves or the country to imagine that gains or losses in these incoherent lands are the same as gains or losses in the organized world, that of France or Italy—or India.63

Galbraith’s letter reached the President at a crucial moment. His Pentagon and national security aides had been meeting almost daily to decide whether, despite the disaster at the Bay of Pigs, to airlift 11,000 heavily armed American troops into Laos to supplement the 25,000-man Laotian Army (the entire budget of which was being paid for by Washington—making Laos the biggest per-capita recipient of U.S. aid in the world). Favoring intervention were Defense Secretary McNamara, Secretary of State Rusk, National Security Advisor Bundy, their principal deputies, and the Joint Chiefs of Staff. McNamara confidently calculated he could have an initial vanguard for the 11,000 troops moving into Laos less than a week after the order was given. The Chiefs, however, saw the 11,000 troops only as the first wave of a 60,000-man force, and urged Kennedy to use nuclear weapons if Laotian guerrillas, whose numbers were far smaller, proved resistant to this massive incursion. (Air Force Chief of Staff Curtis LeMay had even larger goals: the President, he told the group, should be prepared to use Laos as the start of an all-out war with China.)64

Only Kennedy himself opposed sending U.S. troops to Laos. He’d been chastened by what had just happened in Cuba, and though he wouldn’t say so, was very angry about the advice he’d gotten. His real feelings were probably expressed by his brother, during one National Security Council meeting after the Bay of Pigs, when the young Attorney General had shouted, “Goddamn all of you! You’re supposed to be so bright, and you helped get the President elected, and now you’ve got us into this situation, and the Russians will think we’re a paper tiger!”⁶⁵ Right after the Bay of Pigs, when Richard Nixon had urged on him a full-fledged U.S. invasion of Cuba—and intervention in Laos—Kennedy had replied, “I just don’t think we ought to get involved in Laos, particularly where we might find ourselves fighting millions of Chinese troops in the jungle.”⁶⁶

Just before Galbraith’s letter reached him, Kennedy held up his advisers’ invasion plans because the warring Laotian factions and their backers had agreed to a cease-fire negotiated under intense pressure from the International Control Commission, chaired by India. (India was joined in its efforts by Great Britain and by Averell Harriman, who as Kennedy’s ambassador-at-large in Geneva, representing the United States at the ICC, also sought to avoid intervention.) Indeed, Galbraith’s letter also reported on his discussions with Prime Minister Nehru and the Indian government to help negotiate the cease-fire.⁶⁷

WALTER HELLER AND his colleagues on the Council of Economic Advisors were, not by accident, unaware of the debate over an invasion of Laos as they pored over budget figures for fiscal 1962 and tried to estimate economic growth. Their ignorance of crucial foreign-policy debates was fundamental to the structure of the administration: the Council of Economic Advisors worked in isolation from the National Security Council, and it does not seem to have occurred to anyone that this was a problem.*

Fifteen years earlier Leon Keyserling had considered it the CEA’s duty to be involved in the shaping and defining of America’s military expenditures and of integrating them into planning for domestic economic growth. But under Eisenhower, the CEA chairman, Arthur Burns, had constructed an impermeable wall between White House economists and the armed forces. The Pentagon’s ever-growing budget was not subject to CEA discussion or critique.

Kennedy’s economists prided themselves on being “political,” but they weren’t so in a geopolitical sense, nor were they experienced veterans of Washington infighting, as Galbraith was. (James Tobin had been quite frank when JFK first interviewed him: “I’m afraid I’m only an ivory-tower economist.” Kennedy disarmingly replied, “That is the best kind. I’m only an ivory-tower President.”) What they meant by “political” was that they gradually learned how to lobby in the administration for their policies and viewpoints, and how to help lobby both Congress and the press when the President chose to proceed on an issue within their area of expertise and responsibility. (Heller frequently did so, as one economist noted, by “seeking public support for deficit spending by invoking not John Maynard Keynes but Henry Ford II and [IBM chairman] Thomas Watson, Jr.”) But in the larger context of Cold War politics, the “New Economists” were supremely unpolitical. Cut off from foreign policy and military strategy debates, they lacked what really counts in Washington: the political ability to influence those commitments before they began shaping (however ominously) the very economy the economists proudly planned to manage for optimum growth. Heller acknowledged later, “When [JFK] was involved in [foreign crises such as] the Bay of Pigs, I might not see him for three weeks.”68

Ironically, Galbraith, in distant New Delhi, was in the opposite position. He had held more senior government posts than they (Heller and Tobin—like Gardner Ackley, who succeeded Heller under Lyndon Johnson—had worked as junior economists in the Office of Price Administration), and he had intimate and regular epistolary contact with the President as well as with White House and State Department aides such as Schlesinger, Harriman, Ball, and Bowles. He saw the future of Keynesian policies on the New Frontier with a quite different eye than Heller.⁶⁹

In July 1961, Galbraith wrote to Kennedy of his latest concern in Southeast Asia:

South Viet Nam is exceedingly bad. I hope, incidentally, that your information from there is good [as] I have an uneasy feeling that what comes in regular channels is very bad. Unless I am mistaken [South Vietnamese President Ngo Dinh] Diem has alienated his people to a far greater extent than we allow ourselves to know.

This is our old mistake. We take the ruler’s word and that of our own people who have become committed to him. The opponents are thieves and bandits; the problem is to get the police. I am sure the problem in Viet Nam is partly the means to preserve law and order. But I fear that we have one more government which, on present form, no one will support.⁷⁰

Once again, Galbraith had shrewdly grasped the pressures Kennedy was under and the risks he faced. The unstable Laotian armistice of May had kept Kennedy from ordering a massive U.S. incursion into Indochina for the moment, but the State and Defense departments and the Joint Chiefs of Staff were still convinced that American diplomacy would have to give way to American military force in Southeast Asia.

Only the month before, Kennedy had returned from his first summit meeting with Nikita Khrushchev, in Vienna, and Galbraith became even more convinced that the immense costs of the Cold War posed even graver dangers than he had hitherto thought. Within the White House, one group of advisers was debating foreign-policy actions without considering their domestic economic effects; a few doors away, talented economists were constructing economic growth plans that took no account of what Galbraith called the “culture of foreign misadventure”—either the enormous size of the military budget and its particular stimulative effects, or the domestic economic risks posed by a costly commitment of U.S. resources abroad. To Galbraith, this was the worst kind of folly.

Khrushchev, confident that the inexperienced JFK could be bullied, had savagely berated him, demanding that all Allied troops be withdrawn from Berlin and darkly threatening “firm measures” if they weren’t. Kennedy had been shaken, and to show his resolve, he put the armed forces on alert, mobilized the reserves, and announced that the government would spend an unbudgeted extra $3.2 billion on military outlays, including 200,000 new troops. This came as a complete shock to Heller and the CEA, but it was mild compared to his dismay when Kennedy then laid plans for a $3 billion tax increase to pay for the spending. With the nation just pulling out of recession, Heller feared the tax would jeopardize any chance for quick recovery. He and Samuelson eventually persuaded Kennedy not to seek the increase but accepted that, as a trade-off, they would aim to have the budget in balance in 1962.71

In a nationwide television address Kennedy warned that he would not permit the Communists “to drive us out of Berlin, either gradually or by force.” To underscore his determination, he called for a massive construction program of fallout shelters, and told the country that “if war breaks out, it will have been started in Moscow and not Berlin.” Overnight, to millions of ordinary citizens, the United States seemed closer to nuclear war than at any time since 1945. When the Soviet Union began to construct the Berlin Wall in mid-August, Kennedy called General Lucius Clay out of retirement, and Clay prepared for a second Berlin Airlift. The East Germans briefly held a U.S. diplomat, so Clay sent American tanks to Checkpoint Charlie—and the Russians responded in kind. For a few hours, war seemed imminent, until the diplomat was released.* By late summer the crisis in Germany eased—others would develop soon enough—but the unexpected $3.2 billion in new military spending stayed, twice as much as all the new stimulative measures the administration undertook that year for unemployment, housing, and public-sector construction.

Vice President Johnson was sent on a tour of Asia meant to reassure American allies of U.S. commitments to them. Stopping in Saigon, he passionately reaffirmed America’s commitment to Vietnam’s “freedom,” and incautiously pronounced President Diem “the Winston Churchill of south Asia.” From Vietnam, Johnson came to India, where Galbraith raised with him his concerns about Laos, but LBJ proved more interested in speech making and hand shaking with the locals than in discussing Laos with Galbraith. Galbraith arranged a visit with Nehru, where LBJ and the prime minister “spoke rather formally on education which they favored, peace which they wanted and the Third Five-Year Plan which they praised. The rest of us listened with respect and drank tea.” Johnson did let out a memorable Texas “yee-hah” at the Taj Mahal; the trip’s diplomatic achievements were less remembered.72

Galbraith drew no comfort from Johnson’s militant hyperbole, and was further shaken that fall when he found out that the Pentagon and the President’s civilian advisers were now pressing Kennedy to send 40,000 U.S. troops to Vietnam. Kennedy was resisting, eager to find a way to negotiate his way out of what he called this “dangerous mess.” But in Washington, none of his top advisers were offering him the policy options he wanted.⁷³

Galbraith, however—hopeful that he could win Kennedy to a more robust domestic expansion program than the CEA advocated and simultaneously persuade him to reduce the risk of further costly and dangerous commitments abroad—was already laying out for the President his own sophisticated synthesis of foreign, domestic, and economic policies.⁷⁴

To begin with, Galbraith placed greater emphasis on solving structural deficiencies in the American economy than on simply increasing aggregate growth per se.⁷⁵ He was following the arguments he had developed in The Affluent Society, especially those concerning the “social imbalance” between “private affluence” and “public poverty.” He colorfully (and, to economists, heretically) reminded Kennedy that the idea of aggregate economic growth

is extremely important to economists and about two thousand other people in all the land. This enlightened minority knows that growth is really important. The rest can’t remember whether the growth rate is three per cent, six per cent or ten per cent. And instinct tells them that the expanding element in Gross National Product doesn’t include the really vital things like food, clothing or fornication which are already excessively available. Nor does it include medical care, schools, or unemployment compensation which they do want but which they know requires some legislation by what Billy Graham once called the Christ-bitten Congress.

Complimenting Kennedy on a recent speech on economic policy, Galbraith added,

I couldn’t help noticing that immediately after you got through with the charts you got down to child, medical and unemployment care. This is the old political instinct at work. With the principal exception of housing, growth adds the least essential (and most superfluous) privately-produced goods since we naturally provide ourselves with the most important things first. Needless to say, the addition of more and better depilatories has nothing to do with national health and vigor.⁷⁶

Galbraith also stressed the need to do something about poverty, a problem whose solution required significant, targeted government aid and investment, since it had so far shown itself immune to reduction by aggregate growth, especially in inner cities and regions like Appalachia. In an early memo to the President, he had urged him to propose a “Special Assistance Act of 1961, a bill that would include supplementary aid for families of the unemployed; emergency grants and loans targeted to areas with chronic unemployment; a system of grants or low-interest loans for unemployed families to fix up their homes; and a youth conservation corps for unemployed teenagers.”77 The bill was never introduced, but Kennedy did add $215 million for supplementary family aid, $40 million for area redevelopment, and $10 million for low-income and rural housing to his first budget.

Second, Galbraith declared himself suspicious of tax cuts as a stratagem for stimulating economic growth, though he knew Heller was eager to try them. “Once we start talking about tax cuts we will take the pressure off the rest of your program … We now say that housing, school building and urban renewal are needed both for themselves and for their effect on employment. Given the tax cut conservatives will not be slow to say that this will do the job.” Nominal tax rates might appear burdensome—and certainly conservatives always bewailed them as oppressive, especially the 91 percent top marginal rate on incomes, unrevised since World War II. Yet, he pointed out, the top nominal rates were fictitious: the system was so riddled with loopholes that no one paid anything like those rates. Better that a Democratic administration increase federal domestic spending—deficit spending, if need be—targeted where it was needed most and investing in schools, hospitals, and roads, where the federal government spent too little, especially in comparison to its spending on defense.⁷⁸

Third, Galbraith argued that monetary policy should be used to lower both long- and short-term interest rates, in order to reduce consumer credit and mortgage costs. This was in opposition to the CEA’s and Treasury’s view that short-term rates needed to stay high to encourage foreign depositors.

Fourth, concerning America’s international balance of payments, and the related question of increased U.S. gold outflows, Galbraith argued for a strategy of what amounted to “benign neglect.” Giving them a high priority would constrain the President’s abilities to act purposefully in the domestic economy, he argued.⁷⁹

Galbraith had been alarmed when he heard Kennedy suddenly assert, just before the election, that a Democratic White House would vigorously defend the dollar against foreign demands for payment in gold from Fort Knox. Though hardly a compelling issue to most voters, the nation’s balance-of-payment deficits and the resulting drain on U.S. gold supplies were of great concern to economists, bankers, and Treasury and trade officials. To Galbraith, they risked braking any robustly Keynesian domestic program, just as the Pentagon’s immense budget did. He warned Kennedy against being caught in a trap. “We should be concerned but not alarmed,” and should concentrate instead on growing the domestic economy.80 In the $500-billion-plus American economy, after all, the balance-of-payments deficit amounted to barely $3 billion—a fraction of 1 percent of total GNP. Conservatives would try to use the issue to attack Democratic expansion plans, of course, but any instinct to cut back should be resisted. He reminded Kennedy that Franklin Roosevelt had been similarly persuaded to believe there was a “gold crisis” when he was fresh in office in 1933, and had vainly wasted precious time and political resources on it—and he had faced a much greater problem than Kennedy in 1960. Better politically and economically to blame the gold problem on Republican policy under Eisenhower and carry out a Keynesian program at home.

Two weeks after the election, he warned Kennedy again not to emphasize the issue—and especially not to let opponents or well-meaning but cautious advisers use it to trim back domestic expansion plans. The better alternative was to focus on cutting overseas troop commitments and increasing exports to reduce the payments deficit. At home, he advised, Kennedy should close tax loopholes, install a wage-price policy, encourage productivity advances, and use federal farm payments to strengthen U.S. agricultural sales overseas. At the same time he should advocate support for a European Common Market and a similar structure in Latin America. Most important, he should recommend closer multilateral central-bank cooperation (as Keynes had envisioned at Bretton Woods in 1944) to combat pressure for higher interest rates as the means to control inflation as well as trading imbalances.⁸¹

Kennedy responded enthusiastically, asking Galbraith for details on wage-price guidelines and advice on setting up a task force to reform U.S. tax policies, including who should serve on it. Significantly, however, he didn’t respond to Galbraith’s concerns about the gold issue.

Finally, Galbraith emphasized that no attempt to improve the domestic economy could succeed unless there were more stable relations with the Soviet Union. “New Economists” too often acted as if they thought of growth as growth and government stimulus as government stimulus; in their forecasting models, building a missile silo was the same as building a school in dollar and GDP terms, opening a naval base the same as opening a new park. And their theoretical neglect of foreign policy spilled over in practical terms. In the nearly 400 memoranda it sent to JFK, the CEA never highlighted nor evaluated differences in the composition or end purposes of federal spending, or the economic trade-offs and aggregate implications of military spending. These were theoretical and practical limits that Galbraith was unwilling to accept. But he knew that his influence on Kennedy had its limits, that Kennedy heard competing advice and was subjected to the pressures of prevailing opinion.

In June 1961, on his first return trip from India, Galbraith discussed all these points and issues with Kennedy—occasionally in some unusual locations. Once, Galbraith found himself briefing Kennedy in the White House family quarters as the President took a bath, now and then interrupting their conversation to adjust the hot-water tap with his foot. On another occasion, this time in the President’s bedroom, he and the President, along with Dillon, Heller, and a few others, skillfully pressured Fed Chairman Martin into foregoing an interest-rate hike.82

AS THE ADMINISTRATION lurched from one dramatic foreign crisis to another its first year—from the Bay of Pigs to Laos, from the Congo to the Vienna Summit, and Berlin—Galbraith realized more and more how closely the domestic economic agenda was linked to the country’s foreign policies. This meant that at every turn he needed to encourage the President to resist advisers who favored costly military engagements and foreign economic policies that subordinated Keynesian interests at home.

Galbraith returned again to Washington in early November 1961, in order to accompany Prime Minister Jawaharlal Nehru of India on an official state visit. After barely six months in New Delhi, he had already forged a close friendship with Nehru, both men being “much too intelligent and sophisticated to let diplomatic differences undermine their mutual personal admiration,” as Nehru’s biographer later wrote.⁸³ But Galbraith’s closeness to the Indian leader and his easy, independent access to President Kennedy were a constant source of worry—and no small consternation—for State Department bureaucrats. For example, as part of Nehru’s visit Galbraith decided the two leaders might enjoy a relaxed private conversation somewhere outside Washington before taking up their official meetings. He arranged for Hammersmith Farm, the Newport, Rhode Island, estate of Jacqueline Kennedy’s mother and stepfather, to be the locale—and then didn’t bother to include anyone from the State Department on the guest list. A flurry of anxious, envious interoffice memos discussed “what Galbraith was really up to.”

There were reasons for State’s bureaucrats to worry. On November 6, over a lengthy, intimate luncheon at the estate, Kennedy and Galbraith pressed Nehru and his foreign minister, J. M. Desai, to take active leadership to neutralize the situation in Vietnam. This was a foray that Galbraith knew Secretary of State Rusk would not approve. Using the talking points Galbraith had given Kennedy, the President urged Nehru and Desai to talk directly with Ho Chi Minh, to support a U.N. observer corps in Vietnam, to strengthen the International Control Commission, even—this was a proposal from Chester Bowles—to help create a “belt of neutrality” girdling Southeast Asia.⁸⁴ Nehru listened carefully but “was not responsive,” Galbraith wrote later, “partly because our ideas on how to bring the Viet Cong insurrection to an end were far from precise.”⁸⁵ Nehru was clear on one thing, though: “We should not send in soldiers.”⁸⁶ Galbraith went to bed that evening determined to keep doing what he could to dampen the smoldering embers he feared might burst forth into a consuming war in Southeast Asia.

In Washington the next day, there were several hours of formal talks with Nehru and Kennedy in the Oval Office joined this time by Rusk, Assistant Secretary of State Phillips Talbot, and the National Security Council deputy chief, Walt W. Rostow. The talks didn’t go well, for Nehru showed no sign of being willing to back U.S. policy, and immediately afterward Kennedy talked privately with Galbraith about what to do next. Galbraith quickly headed for Rostow’s office.

Rostow and Galbraith had known each other since 1946, when they worked together as two of “Clayton’s men” at the State Department. They had agreed then that a prolonged military struggle with the Soviet Union was inadvisable, but in the intervening years Rostow’s attitude toward the Communist world had hardened dramatically. A brisk, owlish, Yale-trained economic historian, Rostow had joined the economics department at MIT in 1950. During the 1950s—although they saw each other socially, shared a common interest in Indian economic development, and served as Kennedy advisers—the two men had gone in very different directions. In Rostow’s case, his policy shift fit well with work being done by other MIT economists. MIT’s president, James Killian, was eager to build his economics department around Samuelson into a world-class faculty, on the level of its science and engineering departments. As part of his strategy, he had created the Center for International Studies, an interdisciplinary research program led by economists but including other social scientists. To fund it, he relied not only on conventional sources such as the Ford Foundation but also (a decision he later came to regret) on secret and quite lucrative research and consulting contracts with the newly formed Central Intelligence Agency.87

At CENIS, Rostow began work under a CIA grant on his famous theory about the stages of economic growth. Through his research, he was introduced to the problems of Southeast Asia, and soon was advising Nelson Rockefeller and the Eisenhower administration on covert action as well as economic development policies. Gradually he synthesized a near-seamless Cold War vision of Third World economic and political development coupled with a tough-as-nails anti-Communism predicated on using counterinsurgency forces as freely as aid dollars. In 1961, as deputy director of Kennedy’s National Security Council, Rostow saw his job as applying the lessons he’d learned, and South Vietnam was the perfect laboratory.⁸⁸

Rostow’s closest ally at the White House was the retired general Maxwell Taylor. Taylor, a former Army chief of staff, was President Kennedy’s personal military adviser, a handsome, self-confident former paratrooper who’d chafed during the Eisenhower years over the vast amounts of money that had flowed to the Air Force and Navy and the neglect (in his view) of the country’s ground forces. The Defense Department’s emphasis on “more bang for the buck”—and thus the intensive funding of the Strategic Air Command and the Air Force’s and Navy’s long-range missile programs—had left the Army resentful of what it felt amounted to garrison duty in Europe, Japan, and South Korea. Taylor believed that replacing the Eisenhower era’s so-called New Look doctrine of massive nuclear retaliation with a multilevel strategy of “flexible response” would allow the United States to fight two large and one small war simultaneously, with heavy emphasis on the Army rather than on missiles and bombers.⁸⁹

Rostow shared Taylor’s belief in “flexible response” as America’s new war-fighting doctrine, and both in turn were enamored of the Army’s top specialist in “unconventional warfare,” General Edward Lansdale. Lansdale’s success in the 1950s in helping suppress the Communist-inspired Huk rebellion in the Philippines had convinced Rostow and Taylor that South Vietnam was the next place to utilize Lansdale’s counterinsurgency skills in the global war against Communism.90 Lansdale’s analysis of “the Vietnam question” was completed shortly before Kennedy took office, and the Army passed it on to Rostow. After reading it—and already convinced that Vietnam and Laos were “the most dangerous challenge” the West had faced since World War II—Rostow arranged an Oval Office meeting a week after the President took office. There, he, Rusk, and Lansdale laid out the “crisis.”

Kennedy expressed interest in the possible use of U.S. Special Forces to train the Vietnamese in counterinsurgency techniques and perhaps in sending Lansdale as ambassador to Saigon; but he perspicaciously scoffed at the idea that paying for a bigger army for President Diem would make much difference, and he ignored the arguments favoring the introduction of U.S. combat troops. After their meeting, Rostow and Lansdale found themselves temporarily isolated. The Joint Chiefs weren’t keen to send Green Berets to Asia, State vetoed Lansdale as ambassador, fearing he was “a lone wolf operator,” and President Diem ignored Lansdale’s ideas for reforming the South Vietnamese army.

But the crisis in Laos in April and May, and then the Berlin crisis over the summer reignited Rostow’s effort to focus the White House on Vietnam. When Kennedy in May rejected his advisers’ call for 60,000 U.S. troops (and possible use of atomic weapons) in Laos, he had given way slightly on Vietnam, ostensibly to help control cross-border incursions by Communist troops. He approved American bankrolling of an additional division for the South Vietnamese army, and agreed to send a few hundred U.S. soldiers to Saigon for training purposes, but the Pentagon’s proposal to insert a U.S. division in Vietnam, along with naval and air units, went nowhere.

By September, Diem was asking for money for 100,000 new troops, the new U.S. ambassador in Saigon, Frederick Nolting (fresh from NATO), was supporting the request, and McNamara increasingly now saw Vietnam as “a laboratory for the development and procedures for the conduct of sub-limited war,” a cornerstone of Taylor’s flexible response doctrine. (Air Force General Curtis LeMay was equally enthusiastic, hoping to test out his newly created “Jungle Jim” system of heavily armed tactical air support for counterinsurgency.) With McGeorge Bundy warning him against any “appeasement” of the Soviet Union over Berlin, Kennedy finally approved Rostow’s oft-repeated request to send Maxwell Taylor, Lansdale, and him to Saigon to “review U.S. options.” But the President was apprehensive, knowing what they’d likely propose on return: Rostow by then wanted JFK to create a new Truman Doctrine for Southeast Asia.⁹¹

Galbraith meanwhile was lobbying the President as hard as Rostow to go in the opposite direction. He’d written Kennedy six pointed memos since April on policy in Southeast Asia, and on both his return trips to Washington, he had met with the President to discuss these concerns. He’d also talked at length with Chester Bowles and George Ball, and he’d talked with Harriman in Geneva; all were as worried as he about the direction the President’s closest advisers wanted to go in Saigon.92

Galbraith had noted in June that “the fundamental division in American policy is coming to be over foreign policy,” with those opposed to armed intervention “under suspicion of being appeasers.” In August, he’d had a long conversation with Bowles in New Delhi, during which “I was admirably instructed on what I already knew, didn’t believe or couldn’t remember,” as he told the President. “He thinks he has aroused bureaucratic enmities by firing too many people; I said it was my impression he had aroused yours by not firing enough … Chet promised to do his best but says he is boxed in. In government people get boxed only when they won’t kick their way out.” He added, “If the State Department drives you crazy you might calm yourself by contemplating its effect on me. The other night I awoke with a blissful feeling and discovered I had been dreaming that the whole Goddamn place had burned down. I dozed off again hoping for a headline saying no survivors.”⁹³

By early October, Galbraith was more worried about Vietnam than Berlin, having read a State Department cable indicating that Diem now wanted a U.S.-Vietnamese defense treaty, a virtual guarantee of U.S. intervention. After his friend Jerome Wiesner, JFK’s science adviser, arrived in New Delhi and described the advice the President was getting, Galbraith cabled the President again about the impending Taylor mission.

Dear Mr. President:

I keep seeing stories that we are to have a serious review of foreign policy. Men of wisdom will applaud this. When things are not good, it is usually imagined that a review, or possibly a reorganization, will make them better. No one ever asks whether the best is being made of a lousy situation … However, a good review will create a lot of needed employment for the State Department.

But obviously bureaucratic reviews seldom got to the heart of real problems:

Foreign policy, like domestic policy, is a reflection of the fundamental instincts of those who make it. All of us have been reared with the same instincts, more or less—that we should combine courage with compassion, suspect pompous or heroic stances, respect our capacity to negotiate, refuse to be pushed and seek solutions in social stability rather than military prowess.

He then connected the risks foreign intervention posed for Kennedy, American liberalism, and a successful liberal Keynesianism—the threads that bound together his own views.

I do worry a good deal about the domestic political position in which our foreign policy will be placing us. Ahead of us, in fact, are the same difficulties that beset the Truman Era. The right, in the United States, will always criticize reasonableness as softness. To be sensible is to appease. And to knock the Soviets or the Chicoms [Chinese Communists] into the gutter is not the least bit warlike. It is the only thing they understand and respect. Democrats are warlike because they are weak-kneed.

The Truman Administration never developed a way of dealing with this dialectic. Sometimes it brought Republicans, including Dulles, into the Administration with the hope that this would blunt the attack. Sometimes it tried to show that it could talk as pugnaciously as the Republicans. Neither worked.

The answer, I am sure, is to pin the label of warrior firmly on these goons. This is not an emotional reaction but a sound political tactic to which they are vulnerable. When they speak of total victory they invite total annihilation. They aren’t brave but suicidal. There is a curious superficial pugnacity about the American people which, I am persuaded, does not go very deep. They applaud the noisy man but they reconsider if they think him dangerous. We must, I feel, make it clear that these men are dangerous. They survive because we have let them have the best of both worlds: they could appeal to the pugnacity as a defender of the peace.

Then, in a paragraph that can only chill the heart of any American who lived through the years that lay ahead, he told the young President,

Although at times I have been rather troubled by Berlin, I have always had the feeling that it would be worked out. I have continued to worry far, far more about South Viet Nam. This is more complex, far less controllable, far more varied in the factors involved, far more susceptible to misunderstanding. And to make matters worse, I have no real confidence in the sophistication and political judgment of our people there. Harriman, incidentally, shares my view.94

This was advice that Kennedy was getting from almost no one else in his administration. (The three exceptions—whose directness hardly matched Galbraith’s—were Chester Bowles, George Ball, and as the cable notes, Averell Harriman. All of them were longtime friends of Galbraith’s.)

Galbraith’s October cable reached Kennedy’s desk just as the President formally authorized Taylor to go to Vietnam. Two days later, JFK unexpectedly sent Taylor amended instructions: he and his team were no longer to “evaluate what could be accomplished by the introduction of SEATO or United States forces into South Vietnam” (as the President’s original instructions, written by Taylor for JFK, had said), but simply to survey “courses of action which our Government might take to avoid a further deterioration in South Vietnam.” Making himself perfectly clear, the President added, “You should bear in mind that the initial responsibility for the effective maintenance of South Vietnam rests with the people and government of that country. Our efforts must be evaluated and your recommendations formulated, with that in mind.” Political, economic, and social factors were “equally significant” to military ones. Kennedy was boxed in by his advisers, but he was kicking back.95

As luck would have it, when Galbraith arrived in Washington on November 1 to prepare for the Nehru visit Rostow had just returned from Vietnam, an intensive review of the “Taylor report” was getting under way before it went to Kennedy.⁹⁶ Galbraith knew he needed to talk to Rostow as soon as possible—and says the first White House meeting with Nehru six days later provided the perfect opening. Galbraith went to Rostow’s office that afternoon, and after initially chatting about Nehru’s visit, turned the conversation to Taylor’s mission. What had Rostow learned in Vietnam? What sorts of recommendations would he and Taylor make to the President? After seeing the situation at first hand, were they now urging caution or greater commitment?

Rostow said he was reluctant to talk about the group’s findings because Kennedy himself hadn’t yet seen the report, and because it was so heavily classified, Galbraith wryly recalled, as “to limit access to God and the President of the United States; specifically excluded were the other members of the Trinity.” But Rostow gestured to a pile of memos on his desk where the Taylor report sat in plain view. Galbraith asked to see it; Rostow demurred. Then the phone rang. When Rostow momentarily turned to it, Galbraith instantly decided what to do. “My authorized access as an ambassador being equal to that of the authors of the report, I simply picked up the copy and walked out.”⁹⁷ For whatever reasons,* Rostow did not stop him—and Galbraith left the White House with the Taylor report tucked under his arm. Rushing to his room at the Hay-Adams Hotel, he began to read—and was soon appalled. After glancing through just the first few pages, he began furiously scribbling notes on a legal pad. Here, he realized, were outlines for what could become America’s next great war.

Taylor and Rostow were calling for the initial dispatch of 8,000 to 10,000 American troops in the guise of “flood relief workers.” Covert operations, cooperation between the CIA and Vietnamese intelligence, and U.S. training of South Vietnamese soldiers were all to be “radically increased.” Toxic herbicides—including a compound called Agent Orange, which Galbraith had never heard of and which Dean Rusk was shortly to describe to Kennedy as a benign “weed killer”—were to be used for the first time to defoliate vast swaths of jungle.†⁹⁸ U.S. helicopters and light aircraft squadrons, manned by uniformed American personnel, were to be sent out in support of what would henceforth be South Vietnamese operations jointly planned with the Americans. U.S. air and naval forces were to prepare for direct but unspecified “harassment” of North Vietnam itself.

Whatever the cautionary proscriptions and initial limits and caveats the report contained, here was the rationale for an open-ended American commitment to military engagement in Southeast Asia. But Galbraith had already let the President know his own views on this folly, and even before going to Newport with Prime Minister Nehru, Kennedy had read his memo, which, presciently, functioned as a point-by-point reply to the Taylor report.

On November 1, Galbraith had met with George Ball. By then Ball had read the first draft of the Taylor report, and he may well have outlined it to Galbraith at lunch. Later that afternoon, President Kennedy met with Galbraith and former President Truman. During that meeting, Bowles came in with two other State Department officials who were both hardliners on Vietnam, U. Alexis Johnson and Walter McConaughy, to discuss Laos, where ongoing negotiations to neutralize the country were at their end point.

Harriman, as the U.S. negotiator, wanted a peace accord, which would cut off State’s and Defense’s continuing eagerness for troops, but the Soviet Union was insisting that International Control Commission reports of future accord violations should be unanimous, which meant that its satellite Poland would have veto power over them. Rusk favored rejecting the accord if necessary, and he needed Kennedy’s instructions. Picking up the phone, the President called and awakened Harriman in Geneva at midnight. Assured by Harriman that India and Canada could always publish any minority view on the ICC, Kennedy told the delegation from State that he was going to support Harriman, but he did this with “such tact,” Galbraith recalled, “that I doubt they knew.”

Having rescued the Laos accord from collapse, Kennedy called Galbraith aside when the group adjourned. The Taylor mission was due to see him in just forty-eight hours; Kennedy asked Galbraith how quickly he could produce a memo of his opinions on Vietnam. This became the memo Galbraith provided two days later, which mentions “the Taylor Commission [sic] and some of the accompanying press accounts,” but doesn’t indicate Galbraith had yet seen the actual report.

“The situation in South Vietnam is perilously close to the point of no return,” Galbraith wrote. “Serious thought is being given to a military operation in South Vietnam which would entail all the risks of the operation in Korea ten years ago, without the justification of a surprise attack across the boundary, without the support of the United Nations, and without a population determined to fight for independence.” To prevent such a disaster, Galbraith thought the President should initiate a program that would end the fighting, yield a neutral and democratic Vietnam, and put a U.N. presence in place to supervise the peace.

To that end, he told Kennedy he should promptly replace Ambassador Nolting with Ambassador Harriman or George McGhee in Saigon, persuade the U.N. to dispatch observers there immediately, put the few U.S. military advisers already in Vietnam since the Eisenhower days under U.N. command, and open talks with the Soviet Union to help stop the fighting. Thereafter, Galbraith urged negotiations on renewed trade between Hanoi and Saigon, reciprocal diplomatic relations, and major U.S. economic assistance to U.N.-supervised reconstruction. These actions would avoid “the high risk and limited promise of armed intervention,” but would also help greatly to contain Soviet and Chinese influence in Southeast Asia.99

KENNEDY READ GALBRAITH’S memo immediately—and was apparently impressed, for he supported a number of the points during his subsequent talks with Nehru. But at an interdepartmental meeting on November 4, called to discuss the Taylor report the day after it was given to the President, Secretary of Defense McNamara lobbied hard for readying not just 8,000 to 10,000 men for Vietnam duty but six to eight Army divisions—roughly 220,000 troops, he estimated. In support of McNamara, Assistant Secretary of Defense William Bundy (an older brother of National Security Adviser McGeorge Bundy) invoked what came to be called “the domino theory,” declaring that if Vietnam “fell to the Communists” it would lead to the fall of all of Southeast Asia, “right down to Indonesia.” “The strategic implications worldwide,” he gravely asserted, “would be extremely serious.”¹⁰⁰

But the group knew that convincing Kennedy of their views would not be easy. As Taylor cautioned them, the President was still “instinctively against introduction of U.S. forces.”¹⁰¹ And when they discovered that Galbraith not only knew the details of the Taylor report but was pressing the President to resist its recommendations, they were livid. It was a breach of the secrecy in which they’d tried to wrap the report, yet Galbraith’s relations with Kennedy meant that nothing would happen to him. They were in a bind.

But Kennedy was in a much more terrible bind. On the one hand, his own instincts, not to mention his fresh memories of the Bay of Pigs and the Pentagon’s eagerness to invade Laos, told him to hesitate; on the other, he was once again under near-uniform pressure from his national security advisers, who were arguing that anything less than a major engagement in Vietnam would risk disastrous consequences.* First the one, then the other delayed on November 7 and 8 the formal White House meeting meant to review the Taylor report and decide on a course of action. The President meanwhile started leaking word to the press that he opposed sending troops to Asia: articles by Arthur Krock, James Reston, and others suddenly carried news “from senior White House officials” expressing these views. As one Times front-page headline put it, “Kennedy Remains Opposed to Sending Forces after Hearing Report.”102 His advisers meanwhile drafted and redrafted the top-secret National Security Action Memorandum in which he would set forth his directive for action on Vietnam, trying to gauge just how much they could get the President to agree to, and thrashing out remaining disagreements among themselves.

They also lobbied the President relentlessly to take up arms. On November 8, McNamara sent his own top-secret memo to Kennedy, upping the ante from Taylor’s proposal for 8,000 to 10,000 men to 205,000 (a slight revision down from his earlier estimates). In the memo, McNamara carefully deleted a paragraph in his draft version that had told Kennedy he needn’t commit all six divisions immediately; now he said that two divisions should be sent almost at once. Even so, he added, with these 70,000 men, there was still only a fifty-fifty chance of success. In short, if the United States wasn’t willing to make a massive troop commitment, it should expect to lose Southeast Asia to Communism. (Kennedy read the same message in a separate joint memo from McNamara, Rusk, and the Chiefs the next day. Taylor, it turns out, was coordinating these various drafts behind the scene.)

Also on November 8, after a small dinner party that President and Mrs. Kennedy gave in the White House family quarters to honor Galbraith and the British ambassador, David Ormsby-Gore, JFK and Galbraith talked about Vietnam and India. Kennedy had gotten the proposal for 205,000 troops that afternoon. Galbraith offered to stop over in Saigon on his way back to India, and Kennedy accepted at once. They had talked almost incessantly about Vietnam for more than a week—on October 31, November 1, 5, 6, 7, and at 2 a.m. that very morning, when Kennedy had telephoned—and they would talk again the next day.

At noon on Saturday, November 11—eight days after JFK was formally given the Taylor report—the President and his National Security Council finally sat down together in the Oval Office.¹⁰³ That morning Rostow had given JFK a memo on what the President’s advisers would recommend; he pleaded for the largest possible U.S. intervention not only in South Vietnam but in North Vietnam as well. After reading the memo, an alarmed Kennedy sat down and hastily scribbled out a list of questions in anticipation of the noon meeting:

1. Will this program be effective without including the introduction of a U.S. troop task force?

2. What reasons shall we give Diem for not acceding to his request for U.S. troops?

3. Under what circumstances would we reconsider our decision on troops?¹⁰⁴

This was not a President ready to take up American arms in Southeast Asia, and the others knew it. So when Rusk presented their consensus view—in essence embodying the core recommendations of the Taylor report—he hedged in such a way as to make the President feel he was being given a string of distinct options and exit points along the policy path.

Over the next two hours, Kennedy remained aloof, as members of the group commented, one by one, on Rusk’s presentation. But their plan broke apart when Robert Kennedy kept insisting, “We are not sending combat troops. Not committing ourselves to combat troops,” and the President himself then refused to accept Rusk’s advice that he formally declare “saving Vietnam” as a stated national policy goal. “Troops,” JFK coldly told his advisers, “are a last resort.” And if they were ever to be sent, he added, he wanted them to be a multilateral force, not U.S. troops alone.

After more discussion, during which his aides kept pressing on him the need at least to follow Taylor’s advice, if not McNamara’s, the President changed course: he now abruptly said he would endorse the various short-term military recommendations Taylor had made—sending a few thousand U.S. soldiers (as advisers but not combatants), more economic aid, and stepped-up cooperation between American and Vietnamese armed forces and their intelligence services. But beyond that, he said firmly, he would not go.*¹⁰⁵ McNamara’s proposed commitment of more than 200,000 troops was not up for discussion.† Then he adjourned the meeting.

This wasn’t what Taylor, McNamara, or the others wanted. So, rather than taking the President’s careful proscriptions as clear limits, they took them as openings. For an eager McNamara, Kennedy’s sharply hedged agreement was all he needed to hear. The next day, Sunday—without waiting for the President to approve the formal National Security Action Memorandum—McNamara drafted orders for the Pentagon. First, the Chiefs were to proceed immediately on the limited new deployments of noncombat troops to Vietnam that Taylor had recommended; more important, they were to review and update contingency plans to move more troops to the western Pacific in preparation for a larger engagement.¹⁰⁶ At State, Rusk’s aides drafted a telegram to the American embassy in Saigon, carefully dancing around the distinctions the President had settled on the day before.¹⁰⁷

On Monday morning, Rusk met separately with the French and British ambassadors to brief them on the decisions President Kennedy had taken on Saturday. He soothingly (and falsely) reassured Herve Alphand—whose government was firmly opposed to introduction of any kind of U.S. forces in Vietnam, combatant or not—that while there was no plan to send troops now, the possibility would not be discarded. To Sir David Ormsby-Gore, Rusk was more candid: he detailed the plans to send the 8,000 to 11,000 noncombatant troops Taylor had recommended and roles they were to play, acknowledging that their presence in Vietnam would clearly violate the Geneva Accords. Then, contrary to what Kennedy had ordered Saturday, Rusk said that while the United States had “no immediate plans” to send combat troops to Vietnam, it might well decide to do so “depending on the situation some weeks hence.”

On Monday afternoon, as McNamara’s orders made their way through the Pentagon bureaucracy, Galbraith was flying westward, headed back to India via Hawaii, Bangkok, and Vietnam. That morning he’d called Kennedy to say good-bye, but instead of pleasantries, the President had reiterated his direct instructions given earlier: Galbraith was to reach Saigon as quickly as possible and report back personally to Kennedy alone, using the CIA as back channel, on what he learned there, including his own recommendations for what should be done next. The President didn’t tell him the details of the National Security Council meeting, only that he should report back immediately.108

A WEEK AFTER leaving Washington, Galbraith was back in New Delhi, having spent several days talking with U.S. and Vietnamese officials in Saigon, as well as with American military officials in Hawaii and Bangkok. It had been an edifying experience. Ambassador Nolting and senior U.S. military officials were optimistic, junior officers guardedly less so. One briefing Galbraith described as “geared to the mentality of an idiot, or more likely, a backwoods congressman.” There were few signs of combat in Saigon itself, although someone had thrown a bomb at Nolting a few weeks earlier. Driven out of town under heavily armed escort along a new multilane highway paid for by U.S. AID, Galbraith dryly observed that it was hard to tell “friendly jungle” from “Vietcong jungle.”¹⁰⁹

Through the CIA he’d sent a short report from Bangkok telling the President there was “scarcely the slightest possible chance that the administrative and political reforms now being pressed upon Diem will result in real change.” With his characteristic gift for analogy, he added, “While situation is indubitably bad military aspects seem to me out of perspective. A comparatively well-equipped army with … a quarter million men is facing a maximum of 15–18,000 lightly armed men. If this were equality, the United States would hardly be safe against the Sioux.” (“Incidentally,” he added, “who is the man in your administration who decides what countries are strategic? I would like to have his name and address and ask him what is so important about this real estate in the Space Age.”) Back in New Delhi, in a second top-secret cable Galbraith outlined what more he’d found—none of which can have given the President much comfort.¹¹⁰

The cable dealt with twenty-four separate issues, from the popularity of the Viet Cong among Vietnamese peasants to the fighting capacities of the South Vietnamese army, from the political problems of Diem’s regime to the ineffectiveness of existing American policies. The Diem regime, Galbraith warned, suffered the multiple liabilities of being corrupt, incompetent, and unpopular—and it was playing on America’s anti-Communist fears to perpetuate itself in office. U.S. diplomatic and military officers in Saigon were pressing Diem to reform his government, but they weren’t pressing hard enough.

Galbraith did not advocate “abandoning” Vietnam, however. He urged Kennedy to probe the Russians for signs of a negotiated solution. Meanwhile, he said, the time had come to allow a change of regimes in Saigon (just as in 1960 Eisenhower had helped force out President Syngman Rhee in South Korea), in hopes that a successor to Diem might create a more democratic and less corrupt government—’nothing succeeds like successors,” he quipped—while the U.S. pressed forward on every available diplomatic front.

Kennedy gave a copy of Galbraith’s cable to Rostow, who was predictably incensed. He had “no objection” to Galbraith’s idea about replacing Diem, and he suggested quiet contingency planning “if Diem does not perform.” But Rostow then recited his figures on enemy infiltration, and sneered that “to heighten his political argument Ken has grossly underestimated the military significance of the infiltration process; he has ignored Diem’s record down to 1959; and he has ignored the brutal basic arithmetic of guerrilla war”—none of which was true. Rostow also falsified his own extensive ambitions for U.S. combat troops, and concluded by darkly warning that the Communists had to be stopped at all costs. “The New Frontier will be measured in history in part on how that challenge was met. No amount of political jiu-jitsu is going to get us off that hook.”

For good measure, he fired off an equally ferocious letter to Galbraith in New Delhi, telling him, “We should not kid ourselves that we are up against a serious and major offensive mounted from Hanoi; and it will take hard and purposeful labor on many fronts, both inside and outside South Vietnam, to save that area without a war.”111

Galbraith soon came to regret his advice about regime change in Saigon—against which he had in fact counseled before the Taylor report appeared. Several weeks earlier, at a dinner party with Harriman and Schlesinger in Washington, Harriman had shrewdly complained that “the trouble with the State Department is that it always underestimates the dynamics of revolutions.” Someone wondered whether removing Diem might be the answer for South Vietnam, to which Galbraith had replied, “Our trouble is that we make revolutions so badly.”¹¹²

But in the weeks since that dinner party, much had changed between the United States and Vietnam. By the time Galbraith’s cable reached Kennedy, Pentagon officials were already executing McNamara’s orders, and embassy staff in Saigon were reporting to Rusk on President Diem’s hostile reactions to Kennedy’s limited new instructions. Still, JFK had been pushing back on his advisers. On the day Galbraith reached Hawaii, Kennedy had caught wind of what amounted to insubordination, and realized that his insistence on taking no action on longer-term measures to involve the U.S. in Vietnam had fallen on deaf ears.

The record of the four days after the November 11 NSC meeting makes this crystal clear: in memos and conversations among Rusk, McNamara, Rostow, and their deputies, the discussion was all about “losing a strategic moment for the introduction of U.S. troops,” and why it was “unwise and contrary to the lessons of history” even to think about negotiations with the North Vietnamese Communists until President Kennedy had shown the world that “the U.S. is serious about saving South Vietnam.”113 Several administration officers were also very worried about Galbraith’s conversations with the President, and about what his report after visiting Saigon could do to their plans. For example, just as Galbraith left Washington on Monday, November 13, U. Alexis Johnson told Rusk that Taylor had succeeded in arranging for a second NSC meeting in order to pressare the President to reverse his decision prohibiting U.S. combat troops, but that they would “have to move quickly” because “Galbraith has been working hard on this.”¹¹⁴ Johnson told Rusk he was “worried” because Galbraith had gotten hold of a copy of Rusk’s latest instructions to Ambassador Nolting, which supposedly summarized what the President had decided on November 11, but which they both knew were in fact a very aggressive interpretation of Kennedy’s decision: Rusk had told Nolting to inform Diem that the President was promising no troops, but simultaneously to leave Diem believing that the matter was still open. This was entirely contrary to the tenor of Kennedy’s actual decision.¹¹⁵

Kennedy seems to have caught wind that same day of what his aides were up to, and was so alarmed that on Tuesday, November 14, he sent a brisk, clear order to Rusk and McNamara:

I think we should get our ducks in a row … I believe we should make more precise our requests for action. In the papers which I have seen [Defense and State orders supposedly based on the NSC decisions he approved on November 11] our requests have been of a general nature.

He made it very clear once again that negotiations, not expanded fighting, were his first priority. And he also told them he wanted a proposal that Averell Harriman had given him to be taken up immediately.

For Rusk and McNamara, who had just read it, this was not good news. Galbraith, they knew, had stayed with the Harrimans in Washington, and had no doubt apprised Harriman of the contents of the Taylor report and the President’s fears. Harriman was as opposed to sending troops as Galbraith and Kennedy—and in some ways knew even better than the President just how determined Washington bureaucrats worked to get what they wanted from elected leaders.

On Sunday, November 12, the day after the first NSC meeting, Harriman’s memo had asked Kennedy for immediate permission to contact the Russians in Geneva. The goal was to start talks that would lead to a cease-fire in Vietnam, open trade between North and South Vietnam, and create a revamped, strengthened ICC to monitor the accords.116 Kennedy had reacted enthusiastically, and on Tuesday bluntly told Rusk and McNamara he was thinking seriously of sending Harriman to Geneva by the end of the week to start talking with the Russians.¹¹⁷ For a moment, President Kennedy seemed to have the upper hand.

But the next morning, just before the second NSC meeting that Taylor had arranged, McGeorge Bundy weighed in.¹¹⁸ In a memo to the President, he apologized for having left so much about Southeast Asia up to Rostow until now while concentrating on Europe and the Soviet Union. But, he reminded JFK, “the other day at the swimming pool you asked me what I thought and here it is.” He told the President he was absolutely convinced it was right to send fully equipped combat troops to Vietnam, starting with one full division, or about 20,000 to 25,000 men, immediately, and that the promise of these troops (and of more to come) should be used as a bargaining chip with Diem to force reform of his regime, as well as a signal to the Soviet Union and China of the United States’ determination to counter the Communists. A division wasn’t much, Bundy admitted, but worth sending to see if it would shift the tide of battle. Besides, he soothed the President, “the odds are almost even that the commitment will not have to be carried out.”

Bundy’s intervention seems to have tipped some invisible balance in Kennedy; with the secretaries of state and defense, the Joint Chiefs of Staff, and now his NSC adviser all in agreement, when the NSC met a few hours later, Harriman wasn’t present, and Kennedy didn’t mention the idea of sending him back to Geneva. In effect, the advisers had won this round. Yet the President was still upset, and got into a stiff-backed exchange with Rusk in front of the group. The tension in the room is quite apparent from the meeting’s notes:

Mr. Rusk explained the Draft of Memorandum on South Viet Nam. He added the hope that, in spite of the magnitude of the proposal, any U.S. actions would not be hampered by lack of funds nor failure to pursue the program vigorously.

The President expressed the fear of becoming involved simultaneously on two fronts on opposite sides of the world. He questioned the wisdom of involvement in Viet Nam since the basis thereof is not completely clear. By comparison he noted that Korea was a case of clear aggression which was opposed by the United States and other members of the U.N. The conflict in Viet Nam is more obscure and less flagrant.

The President then expressed his strong feeling that in such a situation the United States needs even more the support of allies in such an endeavor as Viet Nam in order to avoid sharp domestic partisan criticism as well as strong objections from other nations of the world. The President said that he could even make a rather strong case against intervening in an area 10,000 miles away against 16,000 guerrillas with a native army of 200,000, where millions have been spent for years with no success.

The President repeated his apprehension concerning support, adding that none could be expected from the French, and Mr. Rusk interrupted to say that the British were tending more and more to take the French point of view. The President compared the obscurity of the issues in Viet Nam to the clarity of the positions in Berlin, the contrast of which could even make leading Democrats wary of proposed activities in the Far East.119

Kennedy by now fully understood his dilemma and immediately afterward talked with Harriman by phone. Right after that call, he ordered Bundy to see Rusk that afternoon. His instructions were blunt: Bundy was to tell Rusk that “the Pres, is still thinking hard and has spoken to Harriman and Taylor.” Specifically, Bundy was to inform Rusk that the President needed people around him who were “wholly responsive to his policies.” Therefore, he wanted Harriman to be made Assistant Secretary of State for Far Eastern Affairs and George McGhee (also opposed to intervention) to replace Ambassador Nolting in Saigon; Galbraith was to be ordered to put all possible pressure on India as chair of the International Control Commission to help find alternatives to U.S. military intervention.

But Rusk fought back at his meeting with Bundy, point by point: Harriman was needed in Geneva to complete work on the Laos peace accords; Nolting should stay in Saigon because “he has Diem’s confidence”; and before Galbraith pressed the Indians on the ICC, the United States first needed to decide that “we mean to hold in Southeast Asia.” He was implying that Kennedy, at the NSC meeting on November 11, had failed to make such a decision—and that Galbraith would undermine reaching it.

As Bundy drafted his report to Kennedy on his meeting with Rusk, he understood that his own relationship with the President was suddenly in jeopardy. Realizing the scale of the policy schism between JFK and his most senior advisers, Bundy grasped that if he stood with Rusk and McNamara now, he would forfeit Kennedy’s confidence, which is death for any presidential adviser. He thus added to his report something that might placate the President: a list of proposed personnel changes, a musical-chairs shuffle of Rusk’s subordinates, adding that Rusk “won’t do this unless you tell him to.” Bundy’s recommendations served their goal. Reading them a few hours later, Kennedy nodded his head repeatedly as he scrawled notes in the margins.¹²⁰

Two weeks later—a week after Galbraith’s cables reached the White House—Kennedy reshuffled the top posts at the State Department, making Harriman Assistant Secretary for Far Eastern Affairs and promoting George Ball to Undersecretary; but Bowles was pulled out of State and Nolting was left in Saigon to placate a bruised Rusk. Whether or not these changes would make the difference Kennedy sought remained to be seen, but Harriman and Ball (like the sacrificed Bowles) were far more sympathetic to Kennedy’s (and Galbraith’s) views. In his diary, after learning of the shuffle, Galbraith recorded his own shrewd assessment of what JFK had—and hadn’t—achieved: “It is all excellent and not a moment too soon; but then Kennedy left in place at his right hand McNamara, Bundy, Rusk, and Taylor.”121

SEVERAL WEEKS AFTER the shake-up, The New York Times reported from Saigon on the arrival of the first of McNamara’s troop deployments, carefully described in official press releases as U.S. Army “flood relief specialists.” The next day, just as the aircraft carrier U.S.S. Core arrived bearing new helicopters, light aircraft, and their U.S. pilots and mechanics, the Times noted that the International Control Commission was considering ceasing operation in Vietnam as a result of the “increase in United States assistance to South Vietnam.” The article mentioned that 1,500 U.S. military personnel were now in the country, and then added, “Many more are expected.”¹²²

*The length of Cushing’s invocation, noted by the press, amused Kennedy, because he knew New York’s Francis Cardinal Spellman, the country’s senior Catholic prelate, had wanted the pastoral moment for himself. But the arch-conservative Spellman was no friend of Kennedy or liberalism, and the invitation had gone to the Boston cardinal Cushing.

*Galbraith by then was a figure of fresh renown in Washington, having been attacked by name by both Goldwater and Nixon during the campaign. He also was of some concern to figures like Robert Lovett, who had been alarmed by Galbraith’s Bombing Survey conclusions and even more alarmed by The Affluent Society. Kennedy badly wanted Lovett in his administration, and offered him his choice of State, Defense, or Treasury. Lovett declined them all and “punctiliously informed Kennedy that he had voted for Nixon, apparently out of fear of J. K. Galbraith” (Schlesinger, Thousand Days, 125).

*Pusey’s regard for Galbraith was never warm and had cooled perceptibly in 1959, when Schlesinger and Galbraith launched a public broadside against Harvard over its choice of honorary degree recipients, which had been given to Republicans in public service five times more often than to Democrats since 1945. The GOP’s list included Eisenhower, Dulles, Lovett, John McCloy, Henry Cabot Lodge, Jr.—and, not unnoticed by Galbraith, Sinclair Weeks. Pusey hated the ruckus the broadside created in the press and among the alumni. Ironically, its alternative recommendation of candidates bespoke the consciousness of the times. All were white males; Harvard had never in 320 years given an honorary degree to a black, Hispanic, or woman save one, the deaf and blind Helen Keller in 1955.

*According to Heller, “We were often amazed at [Kennedy’s] capacity for understanding a particular set of relationships in economics … [He] was capable of digesting rather lengthy and penetrating memos, and it was Ken Galbraith who tipped me off on that early in the game.” Galbraith, of course, had tutored Kennedy in his own view of Keynesian essentials for years. In 1958, for example, he had written JFK, in the tone of a supportive thesis adviser, about the Senator’s performance on Meet the Press. (He had spent the evening before it briefing Kennedy on policy and on its political framing.) On the program Kennedy had vigorously attacked restrictive Federal Reserve policies, pressed the alternative of wage-price guidelines to constrain inflation, and—best of all, from Galbraith’s point of view—made the case for deficit spending when unemployment was high.

*Of course, Heller spoke informally with NSC aides such as the Harvard economist Carl Kaysen. But CEA records and Heller’s files at the Kennedy Library show little sign of detailed knowledge of the planning process prior to U.S. foreign-policy actions being taken. Theodore Sorensen, in an interview with the author, confirmed that the two groups had no regular direct interaction, and Heller acknowledged the same in a memo to LBJ’s aide Jack Valenti in 1965.

*Clay in the crisis proved as shrewd a judge of the Soviets as he had been in 1946. “These were Russian tanks, not East German tanks,” he later remembered. “It was obvious that the Russians did not trust the East Germans in this situation. As soon as they did that, I was no longer concerned. The Russians had come out of hiding, and I was sure they were not going to do anything” (Smith, Lucius D. Clay, 660).

*With the press office nearby, one deterrent to stopping Galbraith is obvious. Rostow could not have welcomed the headline “Ambassador Arrested at White House; Top-Secret Document Theft Charged.”

†Rusk told the President reassuringly that defoliants didn’t violate international bans on chemical weapons, and remarked that the British had used them against Malaysian insurgents in the 1950s. Yet Rusk knew how explosive the plan was: His deputy, U. Alexis Johnson, had warned him that “the key is not making this an operation in itself … We must also stay away from the term chemical warfare’ and any connection with the [Army’s] Chemical Corps, and rather talk about weed killers’. Defense and the Chemical Corps entirely agree on this.” Rusk removed these comments before sending the memo to the President.

*After reading the Taylor report Kennedy compared, to Schlesinger, the troop commitments that Taylor and the others wanted with an alcoholic’s need for drink. “ ‘They want a force of American troops,’ he told me [Schlesinger] early in November. ‘They say it’s necessary in order to restore confidence and maintain morale. But it will be just like Berlin. The troops will march in; the bands will play; the crowds will cheer; and in four days everyone will have forgotten. Then we will be told we have to send in more troops. It’s like taking a drink. The effect wears off, and you have to take another.’ The war in Vietnam, he added, could be won only so long as it was their war. If it were ever converted into a white man’s war, we would lose as the French had lost a decade earlier” (Thousand Days, 505).

*Kennedy’s words were: “I am ready to approve 3. Will not accept 1. Will go for 3.” Point 1 in the Rusk memo was about U.S. willingness to commit U.S. and SEATO combat troops in Vietnam; point 3 was a ten-point list of assistance, from provision of military equipment and more economic aid to the administrative training of Vietnamese bureaucrats.

†After Kennedy refused to commit the U.S. to “saving” South Vietnam, but approved limited deployment of noncombat troops and a warning to Diem about the necessity of government-wide reform, he seemed almost as an afterthought to give an OK to Pentagon contingency plans for what became known as the “McNamara option.” McNamara assured the President he would do the planning only, but take no action. But as the group adjourned, U. Alexis Johnson, with a keener eye to what had just been achieved, noted for the record that “the line has clearly been drawn in Vietnam.”