ABSTRACT
The Kennedy-Johnson years marked a clear departure from the economic policies of earlier postwar presidents. Johnson, in particular, advocated a far more aggressive brand of Keynesianism designed to achieve full employment and support the pursuit of an ambitious reform agenda. He was committed to the proposition that racial equality and the elimination of poverty were contingent on the achievement of full employment. The combination of full employment policy and expanded social spending was an extension of the New Deal Regime, albeit one that embodied the vision of its most progressive advocates. But this embrace of social Keynesianism was brief, undermined ultimately by the stagflation of the 1970s. The combination of high inflation and high unemployment— and the seeming inability of policymakers to find a solution—created a critical window of opportunity for policy changes designed to force a retreat from Keynesianism and the regulatory- welfare state. A period that began with a faith in Keynesian fine tuning and an optimistic belief in the capacity of social policy to address a host of vexing social problems ended with a new faith in unfettered markets and growing skepticism regarding the role of the state.
