The Obama Watch

Obama’s LBJ Syndrome

From millions to trillions, the ghost of Johnson's credibility gap haunts Democrats.

By 3.10.09

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Ambushed at Credibility Gap.
-- Anti-Lyndon Johnson button popular in the 1960s

The 1967 board game was called "Credibility Gap."

Created by two academics, it was inspired by what now might be called LBJ Syndrome, the pattern of behavior exhibited in the 1960s by then-President Lyndon B. Johnson. A pattern of behavior that gradually led Americans to the belief LBJ was a hopeless teller of untruths. "Credibility gap" was the much used political term of the day applied to Democrat LBJ whether talking about subjects major (Vietnam, the economy, health care) or minor (insisting an ancestor fought at the Alamo even though said ancestor was soon found to have never arrived in Texas until a decade afterwards.)

As Americans listen to the smooth assurances from President Obama that his health care plan would cost $634 billion over 10 years, a look back at how liberal assurances like these actually work out in practice is in order. Specifically, let's take a look at the smooth assurances in 1965 from LBJ as to the costs he saw for Medicare. Medicare, of course, was the liberal health care panacea for seniors enacted into law by LBJ and a Democrat Congress in July of 1965 and is a fixture of today's America.

So how much was Medicare supposed to cost the American people?

Promised a solemn LBJ: $500 million a year.

You read that right. The cost of Medicare was projected to be $500 million -- million with an "m" -- a year. So said LBJ himself. Repeatedly, as he noted in his 1971 memoirs. So too did a March 11, 1965 story in the New York Times insist that: "Federal appropriations of about $500 million a year from general tax revenues would be required" to pay for Medicare.

What has the actual cost turned out to be?

In a report in February 2008, barely a year ago, the Wall Street Journal noted the trustees of Medicare admitted "Medicare's unfunded liability is $74 trillion.…According to the Congressional Budget Office, health-care spending is on a course that could crowd out all other government programs."

Crowd out all other government programs. Think of what that means. The current Obama budget proposal is a mind-bending $3.5 trillion. It funds everything from the entire Pentagon to all those 9,000 earmarks up to and including Iowa Senator Tom Harkin's now infamous study of smelly Iowa pigs. Yet it would vanish inside the black hole of the fiscal universe that is Medicare without a trace.

Crowed a gleeful LBJ in his memoirs about securing passage of his Medicare bill: "Forecasts of disaster continued right up until the day Medicare went into effect. There were predictions…that the system would collapse under its own weight. The Commissioner of Social Security, the Secretary of HEW [Health, Education and Welfare, the predecessor bureaucracy to today's Department of Health and Human Services] and I personally tried to reassure the public that such ominous predictions would not materialize. After one such reassuring statement had been issued, I said to John Gardner [the Secretary of HEW]: 'John if you're wrong in your calculations, we're both going to look like the worst kind of damn fools.'"

FORTY-FOUR YEARS LATER, disaster looms. The Medicare system (along with other government-sponsored enterprises like Fannie Mae) is collapsing of its financial weight right in front of our eyes. John Gardner was in fact wrong in his calculations. LBJ's promise of the cost of Medicare now makes him look exactly like the "worst kind of damned fool" if not, as was frequently charged at the time, a serial liar with a "credibility gap." In 2009 the country is $74 trillion hell and gone from the LBJ promise that $500 million a year and a few tax tweaks here and there would usher in the milk and honey of affordable health care for seniors.

What's remarkable is that this kind of short historical memory is precisely what Obama and his followers are so brazenly counting on. Do they know this kind of history? Of course they do. These are not stupid people. They are doing what they are doing with a cold-blooded deliberateness, economic disaster be damned. Why? They are about nothing more complex than giving themselves a crack-like fix from gaining power and holding power. Wielding power, not creating private sector jobs that are at the heart of a healthy economy (and hence an affordable private health-care system), is the very root of a community organizer's mind set, community organizing the job the President used to launch himself into the Illinois State Senate. As with LBJ, who launched his own political career with a community organizer-like job from the Roosevelt administration (he was appointed head of the Texas National Youth Administration, a perch he used to get elected to Congress), Obama is portraying himself increasingly as someone who will do and say whatever is required to hold and maintain power.

Only this past Friday Obama looked the country in the eye and said today's health-care system was causing an American bankruptcy "every thirty seconds." When the data was questioned, Obama's chair of the Council of Economic Advisors, Christina Romer, blithely looked into TV cameras and brightly answered "I'll have to check the numbers but the idea is absolutely true." And there it was: a snapshot of Obama's LBJ Syndrome in action. Say whatever you need to say in the moment, do whatever you need to do so you can get and hold power, in this case the power to reshape America's health-care system for liberal special interest groups. Who in turn will re-elect and re-elect and so on ad infinitum.

The trick the Obama crew learned from LBJ, who in turn learned it from FDR, is to focus always on the promise, never on the results. Just as LBJ cited homey letters from seniors ("Please try to pass Medicare for us old folks," Johnson quoted one elderly letter writer from Illinois) to highlight the need for his $500 million, so too Obama's "Forum on Health Reform" last Thursday in the White House counted a group of "Everyday Americans" among the special interest lobbyists gathered to discuss the need for his $634 billion health plan. You can bet these folks had not a clue of LBJ's Medicare history, nor, presumably, were they told.

IS THERE EVENTUALLY a severe political downside to this approach? Fortunately for Republicans, yes. Over time, LBJ Syndrome eats at presidential popularity like political acid. But not before considerable damage is done to the country. 

What the Obama White House may not realize is that LBJ's poll numbers began dropping, never to recover, in July of 1965 -- barely months after his landslide re-election. This was ruefully noted by ex-Johnson aide and current PBS commentator Bill Moyers in a 1967 appearance on NBC's Meet the Press. Nineteen sixty-seven was the year after a spectacular GOP surge in Congress and a year before Republicans regained the White House they would hold for seven of the next eleven presidential elections through 2008. July of 1965 is also exactly the month that Johnson, to much media fanfare (he flew to Independence, Missouri to put government health-care enthusiast and senior citizen ex-president Harry Truman at his side for the cameras) signed the Medicare bill into law with all the rosy $500 million assurances that things would be just fine. Yes, there were other factors in LBJ's decline from a popularity that exceeded even that of Obama to a humiliating withdrawal from his re-election race in 1968. Vietnam, riots and the inflationary shocks to the economy of massive Great Society spending, to name but three. But none took as serious a toll individually as the growing feeling that whether the subject was Medicare or any number of other issues, LBJ, in pursuit of unchallenged political power, was utterly incapable of telling the truth.

This is why conservatives are right to laser in on the gauzy, warm and fuzzy liberal rhetoric that has in historical practice become a trademark verbal canary-in-the-coal mine. It always signals some explosive new liberal disaster -- if not an outright untruth -- in the making. Perhaps just as importantly, it is also why it is necessary to recognize that the scrutiny accompanying the presidency reveals Obama already exhibiting visible signs of LBJ Syndrome. The pattern of behavior that shows a repeated willingness to manipulate, to deliberately deceive -- or to lie. Incidents ranging from Obama's less-than-candid explanations of his relationships with Reverend Jeremiah Wright and terrorist William Ayers foretold his now abandoned pledges to stop earmarks or appoint lobbyists to his government or, as in his health reform talk, his use of the false 30-second bankruptcy factoid. All are small yet vivid illustrations of an Obama credibility gap in the making.

Social Security is another example of the liberal mathematical scam Obama is employing. Said FDR in 1935 on the financing idea behind his new Social Security program, as quoted in Kenneth S. Davis's pro-Roosevelt history FDR: The New Deal Years 1933-1937: "It is almost dishonest to build up an accumulated deficit for the Congress of the United States to meet in 1980. We can't sell the United States short in 1980 any more than in 1935." But just as LBJ swore up and down that a mere $500 million would finance Medicare in 1965, in 1935 FDR promised a financial support system for Social Security that saw nothing but green pastures ahead. Roosevelt's Secretary of the Treasury, Henry Morgenthau, insisted "a reserve fund…of $50 billion (later reduced to $47 billion) by 1980, with not a dollar of it coming from the federal treasury."

Got that? Social Security would be $50 billion with a "b" to the good by 1980.

What did FDR think of Morgenthau's assurances? Says Davis: "He did express some concern [on the possible] deleterious effects on the general economy. He was soothed when Treasury Department economists told him it would not [have a negative effect on the economy]." Indeed, FDR found it positively "exhilarating" that Social Security would be so successful financially it would be capable of "forever freeing the government of any dependence whatever on private lending institutions! The reserve might even be used, somehow, to reduce the national debt."

By 1980, FDR's promise of a reserve fund holding $50 billion had long since become a joke.

IT IS WORTH NOTING that among the FDR enthusiasts in 1935 was a young radio sportscaster named Ronald Reagan, a self-described "near hopeless hemophiliac liberal." Yet by the time LBJ was making his Medicare proposals a centerpiece of his 1964 re-election campaign, the now-conservative and much wiser Reagan understood exactly how this particular liberal scam worked. He was a hemophiliac liberal no more. Reagan, in his famous television speech for GOP nominee Barry Goldwater, not only correctly predicted LBJ's Medicare proposal would inevitably be engulfed in a sea of debt if passed, he noted Social Security was then "$298 billion in the hole!" By 1980, Reagan was himself elected to FDR's old job and within months of taking office was told that far from the FDR promise of a $50 billion reserve the fund would need an infusion of $75-to-$100 billion over five years just to keep it solvent. In spite of a series of "reforms," by 2008 Richard Fisher, the president and CEO of the Federal Reserve Bank of Dallas, was saying what everyone knew:

The amount of money the Social Security system would need today to cover all unfunded liabilities from now on -- what fiscal economists call the "infinite horizon discounted value" of what has already been promised recipients but has no funding mechanism currently in place -- is $13.6 trillion, an amount slightly less than the annual gross domestic product of the United States.

Again, understand that phrase. The amount of money needed for this one program only is "an amount slightly less than the annual gross domestic product of the United States."

Like his young protégé LBJ thirty years later in 1965 with his $500 million projection of the cost of Medicare, FDR wasn't even close in his assurances to the American people about the costs of Social Security. They were, as FDR himself noted, "dishonest." The FDR-Morgenthau projected Social Security reserve fund of $50 billion in 1980 was already running $298 billion worth of red ink by 1964, as Reagan had pointed out. Today that red ink is hovering around $14 trillion.

It is in this light that the smooth assurances of Barack Obama must be seen. It leaves him open to the charge that he's either "the worst damn fool" since LBJ when it comes to understanding health-care costs or, as the American people eventually concluded with LBJ, he is utterly incapable of being truthful. Obama is quite deliberately taking Americans down the same path as LBJ and FDR, like them giving his word of honor that, in Obama's case, a mere $634 billion spread over 10 years will right the presumed wrongs of American health care. Unlike FDR, who at least has the historical excuse he was doing this kind of thing for the first time, or, to try and be charitable to LBJ, who privately wondered if he could be wrong on the costs and look the "worst damn fool" in history, Obama very much knows better. He went to Harvard, didn't he? The numbers are in on Medicare. The numbers are in on Social Security. Yet none of this makes any difference to Obama. He has made it quite plain, as did LBJ, that he will do what he has to do. The truth be damned. Why? Because this isn't really about health care at all. It's about power.

In which case, recognizing that Obama appears to be showing a metastasizing case of LBJ Syndrome, the real question here for the rest of us should be this:

If $500 million dollars turns out to be a deficit of $74 trillion, and a reserve fund projected to be in the black by $50 billion in 1980 is already $298 billion in the hole by 1964 and is now down by some $14 trillion, how badly off is Obama's liberal math in 2009 about 2019?

Has the red flag planted by LBJ's stunningly bad math (or outright lie) taught us all nothing? Even amidst this Obama stimulus plan and that Obama bailout scheme and the other thing of the Obama budget?

Here's a reference chart from WikiAnswers.com that Americans may find handy in the future Obama has planned for us all:

1,000 X 1 trillion = 1 quadrillion (1015)
1,000 X 1 quadrillion = 1 quintillion (1018)
1,000 X 1 quintillion = 1 sextillion (1021)
1,000 X 1 sextillion = 1 septillion (1024)
1,000 X 1 septillion = 1 octillion (1027)
1,000 X 1 octillion = 1 nonillion (1030)
1,000 X 1 nonillion = 1 decillion (1033)
1,000 X 1 decillion = 1 unodecillion (1036)
1,000 X 1 unodecillion = 1 duodecillion (1039)

Imagine. An American economy in debt to the tune of 1 duodecillion dollars. Your great-great grandchildren will not live to see a debt of this kind paid off.

There's a word for all of these numbers as they apply to Obama's vision of America. One word.

Bankrupt.

And you think Rush Limbaugh is wrong to hope Obama fails? Rush may be deaf but like Reagan he isn't blind, which is precisely why the Obama White House is spending so much time demonizing him and trying to change the subject about what they are really doing here -- and by extension demonizing Reagan himself. Rush knows a red flag when he sees one -- and they knew he would he know. Instead of being raked over the coals by the naïve for saying he hopes the President fails in all of this Limbaugh should be praised as a latter-day Paul Revere. He knows what's coming, as Reagan would know, if we don't fight Obama's LBJ Syndrome.

So should the rest of us.

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About the Author
Jeffrey Lord is a former Reagan White House political director and author. He writes from Pennsylvania at jlpa1@aol.com.