Reasons To Be Cheerful — Part 1

The nature of human communication includes a temptation to focus on bad news. This is not a recent development, fostered by the internet and cable TV. Thousands of years ago, it was already known that bad news travels fast.

The effort to conscientiously focus on good news is a mental discipline which will reward the person who practices it. Charles Calomiris reported the following in December 2022 in the Wall Street Journal:

The percentage of people living in poverty fell from 32% in 1947 to 15% in 1967 to only 1.1% in 2017. Opportunities created by economic growth, and government-sponsored social programs funded by that growth, produced broadly shared prosperity: 94% of households in 2017 would have been at least as well off as the top quintile in 1967. Bottom-quintile households enjoy the same living standards as middle-quintile households, and on a per capita basis the bottom quintile has a 3% higher income. Top-quintile households receive income equal to roughly four times the bottom (and only 2.2 times the lowest on a per capita basis), not the 16.7 proportion popularly reported.

“Real income of the bottom quintile,” Calomiris adds, “grew more than 681% from 1967 to 2017.” He concludes: “Average living standards have improved dramatically.”

If these data seem unfamiliar, it is because of that principle which dictates that the media, left unchecked, tend to focus on bad news. The reader who is regularly exposed to the typical news media will have been so bombarded with negative reports that good news will seem counterintuitive.

Readers may even have developed an automatic skepticism about any good news. Yet pleasant developments do, in reality, take place.

What does this all mean? That in the United States, wage-earners in all categories have experienced increases in their standards of living, and that those in the lowest categories are catching up to the middle and upper classes.

While there is a form of income inequality, if one measures pre-tax earned income, the situation looks quite different if one measures post-tax income from all sources: this is because those earning larger incomes pay a larger percentage of their income in taxes, and those earning smaller incomes receive a larger share of unearned income.

Calomiris continues:

The equality of consumption between the bottom quintile (in which only 36% of prime-age persons work) and the middle quintile (in which 92% of prime-age persons work) is a striking finding.

The savvy reader will be aware of the news media’s tendency to amplify or invent some types of problems. Worth noting is also a tendency to downplay or ignore types of problems.

When the Budget Decides the War: U.S. Defense Spending and the Korean Conflict

The second half of 1949 and the first half of 1950 formed a twelve-month period of history which was a traumatic year for global peace and diplomacy. In late 1949, two events shook the world: the communists took over China and the Soviet Socialists used their espionage network inside the United States to steal the intellectual property needed to build an atomic bomb. In early 1950, a select group of leaders inside the U.S. government received a secret document, titled NSC-68, which unsettled them with its revelations and evaluations of the world military scene. Finally, in June 1950, North Korea, backed by both communist China and the Soviet Socialists, make a surprise attack on South Korea, starting a war which would eventually kill millions of people.

Prior to 1949, there was a seemingly reasonable hope that the world would be able to experience a time of protracted peace. To be sure, the Cold War tensions between the USSR and the western Allies were real and detectable, but America’s monopoly on atomic weapons was assumed to be the trump card which would prevent massive Soviet aggression.

Anticipating peace, the U.S. had begun dismantling its military.

The addition of China to the communist bloc also strengthened the Soviet position. Sino-Soviet relations would remain strong for several years after 1949. In the mid-1950s, those relations would cool.

It was not obvious that the Soviet Socialists were using their spy network inside the U.S. to gain nuclear weapons technology. When they conducted a weapons test in August 1949, exploading an atomic bomb, and when U.S. intelligence agencies confirmed this event was confirmed in September 1949, the global balance of power shifted. The USSR was emboldened, and used ruthless military power to squash uprisings of freedom fighters in Berlin in June 1953, in Hungary in 1956, and in Prague in 1968.

In light of these events, President Truman requested that the National Security Council (NSC) write a comprehensive document, detailing the global military situation. The report, titled NSC-68, analyzed the state of the world, projected possible future scenarios, and advised steps which the U.S. could take in order to be ready for those scenarios. A small number of officials within the U.S. government read the text, written jointly by members of the Department of State and the Department of Defense; the text disturbed the readers: their hopes for a few quiet and peaceful years were dashed.

Instead of dismantling its military, circumstances forced the U.S. to build up its military.

Based on NSC-68, the Joint Chiefs of Staff (JCS) developed a scenario called Joint Outline War Plan Reaper. This was in essence a plan for World War III, and it would go into effect if and when the Soviets attacked. The consensus among the military leaders was that the Soviets would probably attack in Europe. The war in Korea was considered to be a “secondary” theater, as historian William Donnelly writes:

In September 1950, the JCS made their recommendations for a military buildup based on NSC 68. The active Army would expand from ten to eighteen divisions by Fiscal Year 1952, with its active duty personnel strength increasing from 593,526 to 1,567,000. With the end of the Korean War expected in 1951, the active duty personnel strength would fall to 1,355,000 by Fiscal Year 1954, but the number of active divisions would remain at eighteen so that the Army could meet the demands of Joint Outline War Plan Reaper.

Although acknowledging the importance of the Pacific Rim, the plan anticipated a major Soviet offensive, crossing what was then the border between East Germany and West Germany. NATO and U.S. forces calculated that the Soviets would have the advantage in the first few days of the war, so the strategy was to let the USSR extend itself as far as the Rhine (Rhein). At that point, the western powers would have organized a defensive line. The Soviet would have spent their initial energy and would face longer supply lines across unfamiliar territory.

Like all war plans, Reaper was a collection of hypotheticals, as historian William Donnelly explains:

The Joint Outline War Plan was the JCS plan for World War III with the Soviet Union, and Reaper was the first version of the plan prepared in light of NSC 68’s recommendations. Reaper called for ten Army divisions stationed in the Zone of the Interior (ZI — the contemporary term for the continental United States), four in Japan, and four in Europe at the start of the war. Like previous Joint Outline War Plans, Reaper foresaw that the initial Soviet advantage in ground forces meant that the Air Force and the Navy would play the dominant roles in early operations. The ten Army divisions and their supporting units in the ZI would form the General Reserve, portions of which could be deployed overseas early in the war, but whose most important function would be to serve as the cadre for a massive expansion of the Army. The four divisions in Japan would defend it from a Soviet invasion while the four divisions in Europe, along with their allies in the North Atlantic Treaty Organization (NATO), would conduct a delaying operation that, in conjunction with air attacks, would halt the Soviet Army along the Rhine. The U.S. Army, drawing on the resources made available by a World War II-type national mobilization, would expand and then launch a second crusade in Europe, ending the war after four years with a Soviet surrender and a force of eighty divisions.

The implications of War Plan Reaper and the assumptions and attitudes which shaped it were these: The Korean conflict would receive limited resources, and the U.S. would need to engage in substantial defense spending and a military buildup.

Unlike WW2, when the combat operations of the military held a high priority, the Korean conflict would be supplied, manned, and funded around preparations for a speculative war plan. The military units in Korea, where actual fighting was happening in real time, received less funding, because resources were being diverted to a buildup in Europe and in the continental United States.

Not only did supply shortages and a “manpower dilemma” (Donnelly’s phrase) impact the field effectiveness of the U.S. Army in Korea, but morale also understandably suffered. Many of the soldiers in Korea were conscripts who stayed no longer than they were required to do so, while the army sent more experienced soldiers and officers to Europe.

Morale deteriorated further when it became clear that the goal for the NATO and United Nations (UN) coalition, including the United States, was an armistice or ceasefire, not a victory.

Budgetary considerations had a major influence on both the strategies and the tactics of the coalition supporting South Korea in war.

Facing the Greatest Danger Without the Greatest Resources: Balancing the Korean Conflict with the Global Cold War

Following WW2, the United States began to reduce the size of its armed forces. The number of men in the military was reduced. Spending on research and development for new weapons was reduced. Procurement of current weapon systems was reduced. The overall budget for defense spending was reduced.

The war was over. The principal enemies, Japan and Germany, had been thoroughly smashed and were occupied by Allied troops. The United States alone possessed the technology to manufacture and use atomic weapons, giving it an unsurpassable advantage over any competing nation.

America felt secure. There was no need for large military spending or for a large and well-equipped army.

So, from the time that WW2 ended in late 1945 — a ceasefire took place in August, and both sides signed the final surrender papers in September — the United States optimistically anticipated a time of peace. There were no obvious threats of major military action on the horizon, so disassembling the U.S. military seemed like a sensible thing to do.

Four events would startle this calm attitude.

First, the USSR obtained from its network of espionage agents the American technology needed to assemble its own nuclear weapons. In late August 1949, the Soviet Socialists conducted a test, exploding for the first time their own atomic bomb. By early September, the U.S. intelligence agencies confirmed this reality. Suddenly, the U.S. was not the only nation on earth possessing nuclear weapons. This changed the balance of power suddenly and dramatically. The Soviet Socialists no longer needed to restrain themselves in their plans to take over and oppress other smaller nations.

Second, in late 1949, the Communist Party won the Chinese Civil War. This war had started in 1927, dragging on for many years, and had paused during WW2. A few of the freedom fighters who had resisted the Communists fled to the island of Formosa, and set up their own small country, called Taiwan or “free China.” Communist China, or “mainland China,” allied itself closely with the Soviet Socialists during the first several years of its existence.

Third, in January 1950, President Truman asked the National Security Council (NSC) to compose a report about the world’s geopolitical situation. The document, known as NSC-68, was kept secret until it was declassified in 1975. It alarmed the few leaders who had permission to read it. It persuaded readers that, instead of dismantling the military, the U.S. needed to be ready to face major threats.

Finally, in June 1950, North Korea, with substantial support from Communist China, and a smaller amount of support from the Soviet Socialists, launched a surprise attack on South Korea. This began the Korean War, which would ultimately cost the lives of more than a million human beings. Although the majority of military support for North Korea came from China, the Soviet Socialists led the political and strategic impulse behind the war. The procurement of nuclear weapons emboldened the USSR, in which Stalin was still ruling. The global counterforce was the North Atlantic Treaty Organization (NATO), created in 1949, a collective mutual security system, based on a large alliance between thirty nations. These nations pledged to help defend each other, and the major threat was obviously the Soviet Socialists.

The globe was not as safe as had been hoped, as historian William Donnelly writes:

President Truman and his senior advisors quickly concluded that the North Korean invasion on 25 June 1950 demonstrated that the Soviet Union was beginning to take greater risks as predicted by NSC 68. American intelligence estimates stated that the Soviets were not likely to initiate a general war until they had built up conventional and nuclear forces to the point where they could be confident of overrunning Western Europe and deterring an American nuclear response. NSC 68 had warned that 1954 would be the year of maximum danger of a general war. Preventing that war decisively colored the U.S. response to the invasion of South Korea. North Korea’s aggression had to be repulsed lest it encourage further local attacks, but the United States would limit its military commitments on the peninsula in case the attack actually was a Soviet effort to weaken America’s ability to defend the crucial areas of Western Europe and Japan. American leaders decided that the United States would avoid a wider war in Asia, undertake a massive buildup of conventional and nuclear forces to defend crucial areas, use much of that buildup to create a credible conventional defense in Europe, supply its allies with large amounts of military aid, and do all this by 1954 without causing irreparable harm to the American economy.

The thinking about defense spending changed significantly between 1948 and 1951. Although thinking can change quickly, the physical realities change slower. The events of 1949 and 1950 were shocking. There was a lag time between those events and the implementation of plans for a military buildup.

One of the implications of the situation was that the nations supporting South Korea — which included several NATO countries as well as several United Nations countries — fought the Korean War “on the cheap.” Many of these nations were still repairing themselves from WW2, both economically and in terms of physical infrastructure. They were not available for a massive war effort.

The limited military and fiscal resources had to not only support a war in Korea, but develop a global defense system at the same time. Massive amounts of money were required for the research and development of missiles, jet airplanes, and nuclear weapons, as well as the usual conventional forces.

There wasn’t a lot of money left over to fund the Korean War.

Not only was there a lack of money for equipment, supplies, research, and development, but rather there was also, in the words of William Donnelly, a “manpower dilemma.” Soldiers not only have to be paid, but rather also trained, clothed, fed, and sheltered.

The army was experiencing a “massive expansion,” but given the tasks it faced, the needs for men were still greater than the supply. This was especially so regarding leadership positions like non-commissioned officers (NCO). There was a large supply of enlisted men, given the realities of conscription. But draftees remain only as long as they must, and so there was a high rate of turnover among footsoldiers, making leadership even more important. Yet it was precisely among NCO ranks that there was a manpower shortage.

The United States fought the Korean War on a shoestring budget.

Manpower shortages, high rates of turnover, and a high percentage of draftees among the soldiers led to morale problems. Also detracting from morale was the fact that top-level leadership was deciding to treat Korea as a “secondary theater,” with Europe still seen as the likely place for a face-to-face confrontation with the Soviets. A further dampener was the selection of armistice, rather than victory, as the goal in Korean: this was hardly inspiring to already-skeptical draftees who didn’t want to be in the army in the first place.