Speaking of a depressing time long ago, Amity Shlaes reviews new biographies of Herbert Hoover. A slice from Amity’s review:
Temperament aside, both Messrs. Jeansonne and Rappleye spotlight commonalities between Hoover and his successor, not least the progressive devotion to expertise. Roosevelt adviser and Brains Trust member Raymond Moley observed that, in fact, the basis of the New Deal had been laid by Hoover: “Except for the expertness, the information and the plans at the lower levels of the Hoover Administration, the crisis [of the Depression] could never have been surmounted.” What jars is the authors’ assumption that by associating Hoover with Roosevelt, they rehabilitate Hoover. After all, the New Deal, a more intense, less constitutional version of Hoover policy, also failed to yield recovery—for seven more years.
And speaking of destructive policies pushed by U.S. presidents, here’s the abstract of a paper by Burton Abrams and James Butkiewicz in the latest issue of Public Choice:
In late July, 1971, Nixon reiterated his adamant opposition to wage and price controls calling them a scheme to socialize America. Yet, less than a month later, in a stunning reversal, he imposed the first and only peacetime wage and price controls in U.S. history. The Nixon tapes, personal tape recordings made during the presidency of Richard Nixon, provide a unique body of evidence to investigate the motivations for Nixon’s stunning reversal. We uncover and report in this paper evidence that Nixon manipulated his New Economic Policy to help secure his reelection victory in 1972. He became convinced that wage and price controls were necessary to grab the headlines away from the defeatist abandonment of the Bretton Woods Agreement and the closing of the U.S. gold window. Nixon understood the impact of his wage and price controls, but chose to trade off longer-term economic costs to the economy for his own short-term political gain.
The good news is that the next president doesn’t seem all that interested in science, judging from the little he said about it during the campaign. That makes a welcome contrast with Barack Obama, who cared far too much—in the wrong way. He politicized science to advance his agenda. His scientific appointees in the White House, the Centers for Disease Control, and the Food and Drug Administration were distinguished by their progressive ideology, not the quality of their research. They used junk science—or no science—to justify misbegotten crusades against dietary salt, trans fats, and electronic cigarettes. They cited phony statistics to spread myths about a gender pay gap and a rape crisis on college campuses. Ignoring mainstream climate scientists, they blamed droughts and storms on global warming and then tried to silence critics who pointed out their mistakes.
Attempting to find the technically optimal monetary policy is futile if the Federal Reserve’s independence is undermined by political influences. F. A. Hayek, Milton Friedman, and James Buchanan each sought ways to improve the performance of the Federal Reserve. They each ended up rejecting the possibility that technical refinement or minor reforms might be sufficient. After properly accounting for the concerns of robust political economy, each concluded that a fundamental restructuring of our monetary system was necessary. Friedman turned to binding rules, Buchanan to constitutionalism, and Hayek to competing private currencies. We synthesize their contributions to make a case for applying the concepts of robust political economy to the Federal Reserve through the adoption of professional humility, creative thinking, and an emphasis on the politically possible, not the politically acceptable.