Second of three articles
The day after Gov. Robert Docking’s inauguration in 1967, the Kansas Legislature faced a thicket of issues: implementation of three constitutional amendments, prison improvements, demands for more state office space, increased school aid and highway user taxes, help for the poor and elderly, a legislative pay increase, fair housing regulations and a record $600 million-plus budget.
All this and more, the new governor was saying, could be accomplished without a tax increase. Instead, Docking ‒ a Democrat ‒ would be asking a heavily Republican Legislature for specific tax cuts.
Today, as then, a Democratic governor and a state legislature loaded with Republican majorities confront serious issues. The agenda for Gov. Laura Kelly includes a record budget, an inflated economy and soaring consumer price index, proposed tax cuts, and help for the poor (Medicaid expansion) and elderly, and special education funding
In the early Docking years, Republicans were torn by conservative-moderate in-fighting, disputes over labor laws, the fallout from school unification, and dueling over the shifts of legislative reapportionment in 1966.
Republicans today are bickering about abortion, taxes, suspicious books in libraries, marijuana, dismantling voter laws, and how to turn the courts into a political zoo.
Over this, inflation. Our current economic whiplash recalls a time long ago when the governor presented, and legislators accepted, an invitation to inflation. It offered citizens a fairer share from government with no immediate obligation to pay the bill. Inflation incubated promises we could neither deliver nor repudiate ‒ not at home, in Washington, or abroad.
Inflation does not come on at once. It cannot be captured in specific frames. It gathers gradually, a progressive disease that is always diagnosed too late. It became, during the Docking years, the chief of three evils at work in Kansas and across the nation.
In 1967 the great inflation was upon us because Lyndon Johnson concealed the enormous costs of the Vietnam war by leeching money through deficit financing (as would later presidents for war in Afghanistan).
In addition, a domestic rush to inflation: the federal government would become a spigot for the unchecked flow of hundreds of billions of dollars for thousands of entitlements and programs, agencies and activities far beyond the capability of any Congress or president to control.
Kansas was much a part of this, a beneficiary of federal aid to farmers, to the aircraft industry, to highways, airports, education, hospitals, the arts, the poor, the sick, the elderly. We requested and accepted our share of this ever-rising, irreversible escalation.
Inflation fueled our economies. More money circulated because of it. Tax rates could stabilize while sales and incomes jumped, pumping more and more tax collections into the state treasury. The dilemma in those days was what to do with the surpluses ‒ as it is today. We failed to realize at the time that the heartbeat of local government ‒ property and property taxes ‒ was being thrown into arrhythmia by inflationary spirals.
The second force came in the summer of 1972, Docking’s sixth year in office, after the government paid $3 billion to farmers for withholding 60 million acres of grain land from production; the Soviet Union made up for its own crop failure by buying 19 million tons of American grain.
Wheat doubled in price overnight; farmers had money. Their land would double and triple in value, along with their net worth. In the early 1970s,the value of used farm machinery actually appreciated. The Russians gave farmers cash, and inflation gave them an unchecked ability to borrow. It all seemed too good to be true, and a decade later we would find out that it was.
A third marker involved oil and our assumption of unlimited abundance. America was buying eight million barrels a day from overseas. When the Arabs’ cartel discovered this vulnerability, they closed the spigot in 1974. At the time, Kansas, the nation’s eighth largest oil producer (still is), was in a bind, a squeeze on supply and the soaring cost of what was available. Oil prices tripled between 1973 and ’74 to $11per barrel; in 1978 it was $14.54; in 1979, more than $20 per barrel. (Today, $80). Oil prices were shooting ever higher, and so was the cost of living.
Of what value was farmland that could not be tilled, businesses that could not be fueled, goods what weren’t shipped, communities hard pressed because energy was in such low supply at so high a price?
Economists, legislators, professors, farmers, bankers and laborers could describe what was happening to them, but could not explain it.
Next: Needs and dependence