AHC: No Vietnam War, effects on US economic policy

[VioletRiver]

I'm currently working on a TL that involves a very different 1970s and 1980s economically, and one of the major PODs is that there is no Gulf of Tonkin Resolution and LBJ does not escalate in Vietnam. Regardless of the likelihood of this particular POD, I have a few questions about what would theoretically happen down the road.

1) With more funding going towards the Great Society and Space Race, how would the absence of the Vietnam War affect the stagflation of the 1970s?

2) If LBJ is still president in 1971 (which for my scenario he is), would he still pull out of the Bretton Woods system, and if so how would its effects on the US/world economy change without Vietnam War debt?

3) Would the OPEC oil embargo and resulting US energy crisis still occur, even if the Yom Kippur War has a similar outcome? If not, how would oil prices be affected during the following decade?

4) Depending on global economic conditions, would the Iranian Revolution still happen? Could the Shah potentially hold onto power long enough for Iran to remain secular? (Especially if Khomeini dies early?)

Taking all this into account, one of my goals for this TL is to achieve a Democratic 1980s in the US, possibly with RFK at the helm. I'd like to try to keep both parties oriented around social democratic policies, with the GOP remaining moderate and the Democrats center-left. I have a skeleton structure for the elections in such a scenario:

1964: Johnson/Humphrey vs. Goldwater/Miller
1968: Johnson/Humphrey vs. Rhodes/Romney vs. Wallace/(LeMay?)
1972: Rockefeller/Baker vs. Humphrey/Muskie vs. Wallace/??

After this I'm not sure whether giving Rockefeller a 2nd term is the right way to go, since the conditions that led to the party switch in OTL presumably had origins dating back to the 1960s. Since removing Vietnam intervention is often cited as a key factor in reducing stagflation, any thoughts relating to my four questions (as well as suggestions for presidential nominations post-1972) would be appreciated.

 

[VioletRiver]

I'm also wondering how Reagan factors into this--what year would the conditions be right for him to be the GOP nominee (if at all), whether he and others would still advocate supply-side, etc.

 

[Electric Monk]

In 1972?

Humphrey vs RFK
Reagan or Reagan or the ghost of Taft

Those are your choices. Rockefeller’s best chance was 1960, and 1964 without a divorce was his last plausible chance without rather bigger changes. (Supply side spread from the insane economists to Jack Kemp to Reagan, easily interrupted and reduced but not gone.) Oh and even Reagan had enough principle not to pick Rhodes as VP, lol, dunno why he’s on a party nomination. Or why Rockefeller switches, he is not the guy to do that lol.

1) The Viet Nam War caused the beginning of stagflation, as LBJ refused to pay for the conflict because it might harm his Great Society project. However oil prices caused virtually all of the extra inflation in the late 1970s (Iran cost a grand total of 4% of global production, the stock markets flipped out because they are deeply irrational), so depending on oil prices in your timeline things could change.

2) No. Without the rapidly increasing and expensive problems from the war LBJ can hang onto the system as there will be no gold run for a while. Whatever happens he can totally kick it down the road for a while.

3) This one is trickier and depends on American support of Israel and how much Saudi Arabia wants to be an asshole (the answer is usually “huge”, but you never know).

4) Almost certainly. However the Iranian Revolution was fluid enough that virtually any outcome can be argued for.


Neither party was heavily politically polarized in the 1970s. Republican liberals were well to the right of the Democratic Party economically but well to the left on social issues (Scoop Jackson was the Democratic reverse of that position). RFK sounded like Reagan sometimes for example. Rather than a centre-left and centre party you’ll have both parties keeping a conservative and liberal/moderate wing with various shifting inside and outside.

 

[VioletRiver]

In 1972?

Humphrey vs RFK
Reagan or Reagan or the ghost of Taft

Those are your choices. Rockefeller’s best chance was 1960, and 1964 without a divorce was his last plausible chance without rather bigger changes. (Supply side spread from the insane economists to Jack Kemp to Reagan, easily interrupted and reduced but not gone.) Oh and even Reagan had enough principle not to pick Rhodes as VP, lol, dunno why he’s on a party nomination. Or why Rockefeller switches, he is not the guy to do that lol.

First of all, thanks for replying. I'm glad you mentioned Rockefeller's divorce as I totally overlooked that. Would you say that after 1964 he would have been too liberal to helm a GOP presidential ticket? Also btw I didn't mean to imply he would switch parties, I was referring to the party switch of the White House following the 1980 election. As for Rhodes, I've seen him described as a GOP favorite son, and without Romney's brainwashing comment I could see his credibility not taking as big of a hit.

1) The Viet Nam War caused the beginning of stagflation, as LBJ refused to pay for the conflict because it might harm his Great Society project. However oil prices caused virtually all of the extra inflation in the late 1970s (Iran cost a grand total of 4% of global production, the stock markets flipped out because they are deeply irrational), so depending on oil prices in your timeline things could change.

Glad to get some clarification on this.

2) No. Without the rapidly increasing and expensive problems from the war LBJ can hang onto the system as there will be no gold run for a while. Whatever happens he can totally kick it down the road for a while.

I had a hunch this would be the case. If it is delayed, what other events are most likely to trigger it?

3) This one is trickier and depends on American support of Israel and how much Saudi Arabia wants to be an asshole (the answer is usually “huge”, but you never know).

I see. I've read certain threads that insinuate that without America failing so hard in Southeast Asia, the Arab members of OPEC might not want to "poke the bear" as it were and wouldn't do the embargo. I have serious doubts though as to whether this would be the case, seeing as they still did the embargo in OTL knowing full well the military capability of the United States.

4) Almost certainly. However the Iranian Revolution was fluid enough that virtually any outcome can be argued for.

Agreed. I'm still trying to figure out which route I'm going in Iran, but I still wanted to gauge how the previous PODs might have impacted the Revolution.

Neither party was heavily politically polarized in the 1970s. Republican liberals were well to the right of the Democratic Party economically but well to the left on social issues (Scoop Jackson was the Democratic reverse of that position). RFK sounded like Reagan sometimes for example. Rather than a centre-left and centre party you’ll have both parties keeping a conservative and liberal/moderate wing with various shifting inside and outside.

I see. Now that I think about it, isn't it true that the polarization (at least to the degree we see OTL) didn't happen until after 1994? That seemed to just occur to me.

 

[GeographyDude]

Stagflation
1973 and '79 stagflation is very straightforward. The supply curve shifts inward, and the new point of intersection has both higher prices and lower GDP.

The earlier period of stagflation around (?) 1970 is messier, and with what I currently know, I don't understand it.

 

[GeographyDude]

https://books.google.com/books?id=q...ce of crude oil. American consumers"&f=false

Here's an economics textbook saying OPEC quadrupled oil prices in 1973 and doubled them in '79 (of course from a higher starting price in '79).

 

[Don Draper]

Taking all this into account, one of my goals for this TL is to achieve a Democratic 1980s in the US, possibly with RFK at the helm. I'd like to try to keep both parties oriented around social democratic policies, with the GOP remaining moderate and the Democrats center-left. I have a skeleton structure for the elections in such a scenario:

1964: Johnson/Humphrey vs. Goldwater/Miller
1968: Johnson/Humphrey vs. Rhodes/Romney vs. Wallace/(LeMay?)
1972: Rockefeller/Baker vs. Humphrey/Muskie vs. Wallace/??

After this I'm not sure whether giving Rockefeller a 2nd term is the right way to go, since the conditions that led to the party switch in OTL presumably had origins dating back to the 1960s. Since removing Vietnam intervention is often cited as a key factor in reducing stagflation, any thoughts relating to my four questions (as well as suggestions for presidential nominations post-1972) would be appreciated.

You can't have both parties be social-democratic post-60s, it's just impossible. I try not to say things are impossible but with a 60s POD it really is. Civil rights is going to produce a white backlash and one of the parties is going to become the vehicle for it once Wallace's third party inevitably proves unsustainable. And that is going to be interlinked with conservative economic policy as well at least to some degree, to quote Lee Atwater: "pretty soon you're talking about cutting taxes and all these things that are totally economic things, but the subtext is blacks are hurt worse than whites."

 

[Electric Monk]

First of all, thanks for replying. I'm glad you mentioned Rockefeller's divorce as I totally overlooked that. Would you say that after 1964 he would have been too liberal to helm a GOP presidential ticket? Also btw I didn't mean to imply he would switch parties, I was referring to the party switch of the White House following the 1980 election. As for Rhodes, I've seen him described as a GOP favorite son, and without Romney's brainwashing comment I could see his credibility not taking as big of a hit.

Whoops I skimmed it too much, sorry . Rockefeller wasn’t too liberal to helm a ticket, he was too liberal to win primaries as conservative Republicans were the ones voting. Even right-wing Ford was too much (you’ll note he had to throw Rockefeller over the side) when the option of far right Reagan was on the table, only the powers of the Presidency carried Ford through.

If Reagan had picked Rhodes as VP odds are he would have won the nomination in 1976. His campaign team entertained the prospect briefly but because the thought of running with him as VP was so impossible they declined to consider him. In 1968 Rhodes is more of a possibility simply because he’s (ATL) running for President but if Romney is undamaged and Nixon enters, Reagan wins from them splitting the vote unless Romney/ Nixon sweeps an early victory. If Romney is out Nixon wins or Reagan/Rockefeller stop Nixon on ballot one and Reagan wins. Basically probability is Nixon-Reagan-Romney/Rockefeller. Reagan was already well funded and beloved from his Goldwater support.

Edit: “favourite son” means a candidate running mostly/only in his home state during the primaries as a prestige/power/delegation control move.

Now that I think about it, isn't it true that the polarization (at least to the degree we see OTL) didn't happen until after 1994? That seemed to just occur to me.

That nuked a lot of it certainly, combined with talk radio (even in 1978 Senator Brooke was badly troubled by Avi Nelson) and Fox News always backing the most conservative candidate for anything and the insane anti-tax & voodoo views that infected the Party. Newt Gingrich was shockingly key to how polarized things became.

1973 and '79 stagflation is very straightforward. The supply curve shifts inward, and the new point of intersection has both higher prices and lower GDP.

Yet it was markets that caused much of that inflation without growth. As I said Iran took out 4% of the global supply, as one can see in the 1980s that had zero effect on pricing—the market reacted to a 4% loss of oil as if a third of all production had vanished. Wall Street traders panicking like idiots caused the knock on effects of inflation going nuts. No oil price insanity for whatever reason = no stagflation. Ideally OPEC hiking prices can be countered by deregulation of American oil prices as was seen via their success when enacted in 1979.

 

[VioletRiver]

You can't have both parties be social-democratic post-60s, it's just impossible. I try not to say things are impossible but with a 60s POD it really is. Civil rights is going to produce a white backlash and one of the parties is going to become the vehicle for it once Wallace's third party inevitably proves unsustainable.

That was probably bad wording on my part; what I meant to say is that the Democrats remain/become socially democratic and the Republicans remain/become socially moderate and fiscally center-right, but now that you've brought up the 'whitelash' issue I realize it'd probably be hard to achieve both simultaneously for those reasons. It's such a shame that the two-party duopoly is so restraining. Without Buckley v. Valeo and without Carter's presidency, would it be less difficult for the Democrats to perpetuate Great Society-esque policies during the 1980s, or would the stagflation still cause them to move in a more neoliberal direction?

If Reagan had picked Rhodes as VP odds are he would have won the nomination in 1976. His campaign team entertained the prospect briefly but because the thought of running with him as VP was so impossible they declined to consider him. In 1968 Rhodes is more of a possibility simply because he’s (ATL) running for President but if Romney is undamaged and Nixon enters, Reagan wins from them splitting the vote unless Romney sweeps an early victory. If Romney is out Nixon wins or Reagan/Rockefeller stop Nixon on ballot one and Reagan wins. Basically probability is Nixon-Reagan-Romney/Rockefeller. Reagan was already well funded and beloved from his Goldwater support.

Fair point, though my best research indicates that Nixon probably wouldn't run in this scenario, since he viewed Vietnam as the main dividing issue among the Democrats that could allow him to win. Even though in OTL Nixon didn't talk about Vietnam as much during the primary, without the war I have a strong feeling he'd just retire. Also, would Reagan run if Nixon didn't?

 

[Don Draper]

That was probably bad wording on my part; what I meant to say is that the Democrats remain/become socially democratic and the Republicans remain/become socially moderate and fiscally center-right, but now that you've brought up the 'whitelash' issue I realize it'd probably be hard to achieve both simultaneously for those reasons. It's such a shame that the two-party duopoly is so restraining. Without Buckley v. Valeo and without Carter's presidency, would it be less difficult for the Democrats to perpetuate Great Society-esque policies during the 1980s, or would the stagflation still cause them to move in a more neoliberal direction?

It's good that you bring up Buckley v. Valeo, because your POD is going to see major changes to the Supreme Court. Nixon OTL had four appointments to the bench, and if a Democrat (LBJ in your scenario) fills those it will have some large ramifications down the line.

As for stagflation, I would add to what others have already said in this thread about the oil shocks and Vietnam contributing to it, to say that Nixon's pressure on the Fed for massive expansionary monetary policy to ensure his reelection in 72 also was a major contributor. With the right PODs you can mitigate or prevent these to a degree (obviously Nixon's Fed manipulations are the easiest to get rid of.) This won't entirely stop the Democrats' neoliberal turn- the roots of it go back to JFK's administration really, but it can be kept in check to a much greater degree.