Monday, June 20, 2011

Robert Reich on Marriner Eccles

Truthout posted an excerpt from Robert Reich's new book, Aftershock. It tells the story of Marriner Eccles, chairman of the Fed Marriner Eccles, who served in that capacity from November 1934 until April 1948. If you are not familiar with the story, it's a good, short read.

Others had advised reducing the national debt and balancing the federal budget, but Eccles had different advice. Anticipating what British economist John Maynard Keynes would counsel three years later in his famous General Theory of Employment, Interest and Money, Eccles told the senators that the government had to go deeper into debt in order to offset the lack of spending by consumers and businesses. Eccles went further. He advised the senators on ways to get more money into the hands of the beleaguered middle class. He offered a precise program designed “to bring about, by Government action, an increase of purchasing power on the part of all the people.”

Eccles arrived at these ideas not by any temperamental or cultural affinity—he was, after all, a banker and of Scottish descent—but by logic and experience. He understood the economy from the ground up. He saw how average people responded to economic downturns, and how his customers reacted to the deep crisis at hand. He merely connected the dots.


beowulf said...

What an unusual circumstance that the FRB chairman was more progressive in his economics than the politicians! Along the same lines, Drew Westen kicks the crap out of the Democrats again (from the left).
"Today's Republican Party has three wings: the psychiatric wing, the corporate wing, and the Democrats..."

The most interesting part of Westen's story was this:
Consider the following statement about budget deficits, which began a message that beat a tough deficit-focused, budget-cutting message taken straight from the mouth of John Boehner with a large national sample by over 30 points with the general electorate and by an even larger margin with swing voters: "The best way to reduce the deficit is to put Americans back to work. There are 14 million Americans who've lost their jobs through no fault of their own, and they'd be happy to be paying taxes again instead of drawing unemployment insurance.

A 30 point advantage over deficit hysteria and neither party is touching this message! There's such a ridiculously large political vacuum, I still think The Donald will run after all (if Trump declares as an independent, he doesn't have to file till next summer to make the ballot).
the best thing for balancing the budget is to have a strong economy. And the economy can never come back if we are going to always have high unemployment.

Adam2 said...

I heard Marriner Eccles story about a year ago from on New Deal 2.0. It should be told over and over again until it is just a known fact by all Americans.

FDR and Keynes did not do everything in a vacuum. They had proponents in business and banking like Mr Eccles.

Clonal said...

Good article by Dave Raithel

What Fareed Zakaria Meant to Write

Not even the MMT guys will argue you can have both guns and butter when your productive capacity approaches its maximum and not get inflation in the old fashioned sense of "monetary phenomenon." When that happens, one has to accept: to have the physical resources to blow shit up half a world away, somebody in the community has to go without something - shoes, yachts - whichever. And that's a political decision. Who gets fucked in a modern economy where sovereigns issue the medium of exchange and account is a political decision.

In fact, right now any discussion of government involvement in the economy — even to build vital infrastructure — is impossible because it is a cardinal tenet of the true Burkean-Rothbard-Paul conservatism that such involvement is always and forever bad.