A Missing Piece of the Internet

Well, well, well... I was chasing links and discovered that the American Enterprise Institute seems to have lost chunks of its web archives: http://www.americanenterprise.org/hotflash020314.htm in particular. Let me help them.

As the American Enterprise Institute heads this piece, "author, game show host, and law teacher Ben Stein responds to [Paul] Krugman's allegations":

To: Mr. Paul Krugman
Op-Ed Page
The New York Times

From: Ben Stein
Los Angeles, California.

Dear Professor Krugman,

In all of my life, I have never seen a more confused column than the one that appeared on March 12, 2002 on the Op-Ed page of the New York Times about the death of the esteemed economist, policy expert, teacher, and public servant, James Tobin, on the sad occasion of Professor Tobin's death. I was honored to be a student and lifelong admirer of Dr. Tobin, and you do him and many others wrong, and display frightening misunderstanding of the field.

Just to start, you say the great depression was “widely blamed” on laissez faire policies. By whom? It has been blamed on many things, but no serious scholar has blamed it on free market economics. In fact, just the opposite--many blame it on price fixing and restraint of trade encouraged by the New Deal.

Your idea that there is or ever was any intellectual rigor in blaming the great depression on the free market is simply a non-starter, period.

Second, your calling a true scholar and genius like Friedman “naive” is simply astonishing especially in context. Again, I was a student of Tobin at Yale. He had great respect for monetarism, for its central text, The Monetary History of the United States by Friedman and Anna Jacobson Schwartz, and would have been scandalized by someone at your level daring to call Milton Friedman or his ideas and thorough research naive.

For you to further assert that Friedman's monetarism has not stood the test of time is almost unbelievable. What theory do you think governs current Fed policy if not monetarism? Do you really think that even Tobin believed that changes in asset prices (related to his fascinating doctrine of "Tobin's Q", which you totally ignore) caused business cycles, or were more important than fluctuations in money supply in determining levels of economic activity? If so, you have that opinion largely to yourself. I can well recall Tobin in class at Yale in the late sixties heaping praise on Friedman's explanations of the causes of business cycles.

Finally, for you to assert, on zero evidence, that Tobin's time as a member of the Council of Economic Advisers was unique and that since the early sixties, all other Council members have had to hew to a political line and sacrifice honesty and objectivity is insanely insulting to all other members of the Council and their staffs. The history of honesty and objectivity of members of both parties is unquestioned (except maybe by you, again, on a hunch, without any data at all). However, they all loved their jobs and knew who their bosses were. All. The idea that the Kennedy team of economists alone was above politics and holy men of scholarship is comical. I strongly urge you to read "Presidential Economics" by my father, Herbert Stein, a member and then Chair of the Council of Economic advisors, under Nixon and Ford, and whom you smear along with all of the others similarly sited except Dr. Tobin. This little bit of reading by you might save you from such naive assumptions in the future, as well as from smears of the innocent.

It really is shocking that someone of your limited background in economics presumes to judge a great man like Tobin or in eulogizing him to so pervert his opinions and work…and to heap scorn on one of the great minds of all time in economics, Milton Friedman. In short, your piece is a dismaying morass of confusion, insult, and disinformation.

Sincerely,
Ben Stein

—E-mail: tae@aei.org

Paul Krugman's take on Stein, from http://www.wws.princeton.edu/~pkrugman/tobin.html:

YOU KNOW YOU'VE MADE IT WHEN ...

I guess I must be having an impact. You know you're really getting under peoples' skin when they go ballistic over perfectly nice, genteel columns.

I was somewhat surprised, while on vacation, to receive hostile, irrational email attacking my valedictory for James Tobin - the least biting column I've written for ages. Not until I got back and read a short squib in the New Republic did I realize where that came from - a bizarre screed by Ben Stein.

For what it's worth: I can be accused of a lot of things, but a "limited background in economics" isn't one of them. (Thanks to TNR for its put-down - alas, not available online - which points out that I received the Clark Medal, and that Mr. Stein is a game-show host).

Mr. Stein's father was a fine economist, a member of a rapidly vanishing species - moderate Republicans. But while punditry on the right seems to be mainly an inherited position these days (read David Brock's book!), Mr. Stein's genes don't excuse him from the responsibility to do some homework.Vague memories of what he heard in his undergraduate class in the 1960s don't cut it.

I'm tempted to assign Mr. Stein some readings, starting with Tobin's Essays in Economics: Volume 1, Macroeconomics. It gives you a pretty good picture of what he did, of his debate with Friedman (the volume includes Tobin's critical review of Friedman and Schwartz, which Mr. Stein clearly has not read) and much more. I think I understand Tobin's contribution as well as anyone - and no serious economist has quarreled with my depiction of his work. (No, I didn't mention Q explicitly, only by implication; think 730 words, and the need to write something people can understand.)

Oh, and about Friedman: monetarism - which either meant that changes in M2 were the key to the business cycle, or meant nothing at all - has failed. Almost nobody focuses on monetary aggregates anymore; the current fashion in economic policy is "inflation targeting", while the current fashion in academic research is to suppress any explicit discussion of the money supply, and use other indicators of monetary policy.

Friedman's claim to greatness rests not on monetarism, which is now seen as a somewhat embarrassing - and, yes, "naive" - episode in his intellectual evolution, but on two lasting contributions: the permanent-income theory of consumption, and the natural-rate hypothesis.

If I had to psychoanalyze Mr. Stein, I'd say that the idea that I am a serious academic economist deeply disturbs him. After all, if I know what I'm talking about in eulogizing James Tobin, the other things I've been saying in my column might be true, and the politicians Mr. Stein supports might be as dishonest as I claim.

Anyway, I knew Jim Tobin - whom I talked with at length just a few days before his death - a lot better than Mr. Stein. And I certainly know a lot more economics.

And here is Krugman on Tobin, from the March 12, 2002 New York Times:

Missing James Tobin

SYNOPSIS: The passing of James Tobin marks the passing of a good man and the end of an era of honesty

James Tobin — Yale professor, Nobel laureate and adviser to John F. Kennedy — died yesterday. He was a great economist and a remarkably good man; his passing seems to me to symbolize the passing of an era, one in which economic debate was both nicer and a lot more honest than it is today.

Mr. Tobin was one of those economic theorists whose influence reaches so far that many people who have never heard of him are nonetheless his disciples. He was also, however, a public figure, for a time the most prominent advocate of an ideology we might call free-market Keynesianism — a belief that markets are fine things, but that they work best if the government stands ready to limit their excesses. In a way, Mr. Tobin was the original New Democrat; it's ironic that some of his essentially moderate ideas have lately been hijacked by extremists right and left.

Mr. Tobin was one of the economists who brought the Keynesian revolution to America. Before that revolution, there seemed to be no middle ground in economics between laissez-faire fatalism and heavy-handed government intervention — and with laissez-faire policies widely blamed for the Great Depression, it was hard to see how free-market economics could survive. John Maynard Keynes changed all that: with judicious use of monetary and fiscal policy, he suggested, a free-market system could avoid future depressions.

What did James Tobin add? Basically, he took the crude, mechanistic Keynesianism prevalent in the 1940's and transformed it into a far more sophisticated doctrine, one that focused on the tradeoffs investors make as they balance risk, return and liquidity.

In the 1960's Mr. Tobin's sophisticated Keynesianism made him the best-known intellectual opponent of Milton Friedman, then the advocate of a rival (and rather naïve) doctrine known as monetarism. For what it's worth, Mr. Friedman's insistence that changes in the money supply explain all of the economy's ups and downs has not stood the test of time; Mr. Tobin's focus on asset prices as the driving force behind economic fluctuations has never looked better. (Mr. Friedman is himself a great economist — but his reputation now rests on other work.)

But Mr. Tobin is probably best known today for two policy ideas, both of which have been hijacked — his own word — by people whose political views he did not share.

First, Mr. Tobin was the intellectual force behind the Kennedy tax cut, which started the boom of the 1960's. The irony is that nowadays that tax cut is usually praised by hard-line conservatives, who regard such cuts as an elixir for whatever ails you. Mr. Tobin did not agree. In fact I was on a panel with him just last week, where he argued strongly that the current situation called for more domestic spending, not more tax cuts.

Second, back in 1972 Mr. Tobin proposed that governments levy a small tax on foreign exchange transactions, as a way to discourage destabilizing speculation. He thought of this tax as a way to help promote free trade, by assuring countries that they could open their markets without exposing themselves to disruptive movements of "hot money." Again, irony: the "Tobin tax" has become a favorite of hard-line opponents of free trade, especially the French group Attac. As Mr. Tobin declared, "the loudest applause is coming from the wrong side."

Why do I feel that Mr. Tobin's passing marks the end of an era? Consider that Kennedy Council of Economic Advisers, the most remarkable collection of economic talent to serve the U.S. government since Alexander Hamilton pondered alone. Mr. Tobin, incredibly, was only one of three future Nobelists then working at the council. Would such a group be possible today?

I doubt it. When Mr. Tobin went to Washington, top economists weren't subject to strict political litmus tests — and it would never have occurred to them that the job description included saying things that were manifestly untrue. Need I say more?

Yesterday I spoke with William Brainard, another Yale professor who worked with Mr. Tobin, who remarked on his colleague's "faith in the power of ideas." That's a faith that grows ever harder to maintain, as bad ideas with powerful political backing dominate our discourse.

So I miss James Tobin, and I mourn not just his passing, but the passing of an era when economists of such fundamental decency could flourish, and even influence policy.

Comments

[lcr]

"while punditry on the right seems to be mainly an inherited position these days"

yowsa

[rjw]

That Stein piece was a total spoof wasn't it? Please - someone tell me it wasn't serious. And surely he didn't really study economics at Yale? If I were them I'd be sueing for the collateral damage he's causing.

[PaulC]

Ben Stein's letter has been missing for a very long time. My guess was that it vanished from the AEI site around the time that various blogs were posting that Milton Friedman agrees with Krugman.
http://www.pkarchive.org/personal/FromHorsesMouth.html
AEI will probably claim that they lost it when "reorganizing" their site, but it doesn't give the impression that they are proud of being associated with Ben Stein's letter.

I'm surprised it took so long for Brad DeLong to notice.

[Matt]

Stein follows the model of the modern right-wing poseur quite exactly-- He even writes a financial advice column.

[anne]

March 12, 2003

Missing James Tobin
By Paul Krugman - New York Times

James Tobin — Yale professor, Nobel laureate and adviser to John F. Kennedy — died yesterday. He was a great economist and a remarkably good man; his passing seems to me to symbolize the passing of an era, one in which economic debate was both nicer and a lot more honest than it is today.

Mr. Tobin was one of those economic theorists whose influence reaches so far that many people who have never heard of him are nonetheless his disciples. He was also, however, a public figure, for a time the most prominent advocate of an ideology we might call free-market Keynesianism — a belief that markets are fine things, but that they work best if the government stands ready to limit their excesses. In a way, Mr. Tobin was the original New Democrat; it's ironic that some of his essentially moderate ideas have lately been hijacked by extremists right and left.

Mr. Tobin was one of the economists who brought the Keynesian revolution to America. Before that revolution, there seemed to be no middle ground in economics between laissez- faire fatalism and heavy-handed government intervention — and with laissez-faire policies widely blamed for the Great Depression, it was hard to see how free-market economics could survive. John Maynard Keynes changed all that: with judicious use of monetary and fiscal policy, he suggested, a free-market system could avoid future depressions.

What did James Tobin add? Basically, he took the crude, mechanistic Keynesianism prevalent in the 1940's and transformed it into a far more sophisticated doctrine, one that focused on the tradeoffs investors make as they balance risk, return and liquidity.

In the 1960's Mr. Tobin's sophisticated Keynesianism made him the best-known intellectual opponent of Milton Friedman, then the advocate of a rival (and rather naïve) doctrine known as monetarism. For what it's worth, Mr. Friedman's insistence that changes in the money supply explain all of the economy's ups and downs has not stood the test of time; Mr. Tobin's focus on asset prices as the driving force behind economic fluctuations has never looked better. (Mr. Friedman is himself a great economist — but his reputation now rests on other work.)

But Mr. Tobin is probably best known today for two policy ideas, both of which have been hijacked — his own word — by people whose political views he did not share.

First, Mr. Tobin was the intellectual force behind the Kennedy tax cut, which started the boom of the 1960's. The irony is that nowadays that tax cut is usually praised by hard-line conservatives, who regard such cuts as an elixir for whatever ails you. Mr. Tobin did not agree. In fact I was on a panel with him just last week, where he argued strongly that the current situation called for more domestic spending, not more tax cuts.

Second, back in 1972 Mr. Tobin proposed that governments levy a small tax on foreign exchange transactions, as a way to discourage destabilizing speculation. He thought of this tax as a way to help promote free trade, by assuring countries that they could open their markets without exposing themselves to disruptive movements of "hot money." Again, irony: the "Tobin tax" has become a favorite of hard-line opponents of free trade, especially the French group Attac. As Mr. Tobin declared, "the loudest applause is coming from the wrong side."

Why do I feel that Mr. Tobin's passing marks the end of an era? Consider that Kennedy Council of Economic Advisers, the most remarkable collection of economic talent to serve the U.S. government since Alexander Hamilton pondered alone. Mr. Tobin, incredibly, was only one of three future Nobelists then working at the council. Would such a group be possible today?

I doubt it. When Mr. Tobin went to Washington, top economists weren't subject to strict political litmus tests — and it would never have occurred to them that the job description included saying things that were manifestly untrue. Need I say more?

Yesterday I spoke with William Brainard, another Yale professor who worked with Mr. Tobin, who remarked on his colleague's "faith in the power of ideas." That's a faith that grows ever harder to maintain, as bad ideas with powerful political backing dominate our discourse.

So I miss James Tobin, and I mourn not just his passing, but the passing of an era when economists of such fundamental decency could flourish, and even influence policy.

[Barbara]

When I first started reading Ben Stein in the NYT I didn't know who he was. And without even knowing who he was, and without a degree in economics, I wondered why the heck anyone would give him a license to opine because his advice was loopy, and clearly ideologically driven. Then I found out who he was and the pieces fell into place. Now I look for his name and I save that much more time on Sunday mornings.

[spencer]

What I loved about the Stein comments that so many on the right love to make is that the new deal or big govenment caused the depression. The worse times of the depression were from 1930-33, long before the new deal or big government came into existence.

Stein and other keep blaming the depression on something that did not exist at the time of the depression. I would love for one of them to explain how retroactive economic policies work.

[Carol]

I suppose, though, that the AEI had to pull the letter because of the following:
"Just to start, you say the great depression was “widely blamed” on laissez faire policies. By whom? It has been blamed on many things, but no serious scholar has blamed it on free market economics. In fact, just the opposite--many blame it on price fixing and restraint of trade encouraged by the New Deal."

Uh, let us get this right here. The Great Depression preceded the New Deal, so unless the markets were psychically projecting New Deal horror back in time, there is no way this could even be remotely connected to our history, unless Stein lives in a parallel universe, in which case he is psychically projecting error into this dimension.

Loopy financial advice is all over the place, but historical facts (not opionion ) don't really change.

[Chad]

Of course Stein's depression comments are totally standard-issue wingnuttery. The difference is, smart right wingers blame the new deal for prolonging the depression, while the stupid ones (like Stein) blame it for causing the depression.

[anne]

Carol

"The Great Depression preceded the New Deal, so unless the markets were psychically projecting New Deal horror back in time, there is no way this could even be remotely connected to our history, unless Stein lives in a parallel universe, in which case he is psychically projecting error into this dimension."

What a terrific sentence :)

Oh, and I also like the word "loopy," Barbara.

[Troy McClure]

Some time ago I saw Ben Stein on a game show, and at the end of the show, when everyone is supposed to smile and wave, Stein literally shoved a guest aside to get into the camera eye. I thought "what a selfish jerk" and didn't think anymore about him until I read his Krugman letter. I just thought he was a desperate entertainer, but now I know he is a AEI wingnut desperate entertainer.

Krugman was being graceful and respectful about James Tobin and if you don't have the grace or respect to recognize this, then you live in a very small,sad world.

Why, oh why, is the AEI given any kind of respect by anyone? Do the scholars at the AEI kiss their mothers with their mouth?

[PanJack]

Two economists and Ben Stein wash up on Desert island...
...Effect preceed cause...Ben Stein, "Assume a time machine!"...

[anne]

http://www.pkarchive.org/

Forgive me for failing to post the source of Paul Krugman's memorial for James Tobin. The PKArchive is excellent :)

[paul]

Spencer (June 6, 2005 08:24 AM) wrote:

Stein and other keep blaming the depression on something that did not exist at the time of the depression. I would love for one of them to explain how retroactive economic policies work.

And Carol (June 6, 2005 08:28 AM) wrote:
Uh, let us get this right here. The Great Depression preceded the New Deal, so unless the markets were psychically projecting New Deal horror back in time, there is no way this could even be remotely connected to our history, unless Stein lives in a parallel universe, in which case he is psychically projecting error into this dimension.

Because investors had rational expectations, they foresaw the coming New Deal and its associated big government. It was this that led them to cut back on investment and the Great Depression was the result. The decline in investment spending may have been the proximate cause, but the New Deal and Big Government were the ultimate causes(s).

Don't youse guys understand anything about causality?

[Billmon]

Once upon a time -- in a galaxy far far away -- Ben Stein used to be a pretty good financial analyst and writer. His various pieces on Mike Milken and the junk bond factory for Barron's back in the late '80s were both excellent and prescient.

Alas, fame and Hollywood seem to have injected their poison into him. As Brad noted the other day, Stein now thinks he's Moses -- or maybe Joshua to Richard Nixon's Moses. (Call it the Charlton Heston Complex.)

Another few years and he, too, will be throwing telephones at hotel employees.

[Kuas]

Stein understands economics about as well as Daniel Okrent.

[John Stein]

I just wish he would change his name. Fortunately, we are not related.

[spencer]

Paul -- but if you take the theory of rational expectations to its logical conclusion investors in the 1930-33 period would realize that the 1934-1945 era would experience the greatest economic boom in US history -- real GDP growth averged over 12%-- and they would have expanded investments in anticipation of the comming boom.

Remember, that from 1850 to 1925 real per capita GDP growth was only about 1.5%, and since the introduction of big government and the new deal real per capita income growth has averged 2.2%, or about 50% higher then in the era of small government.

[David]

I'm not a specialist on this, but I seem to recall a couple of interventionist things that turned the stock market crash of 1929-30 into a full-scale Depression. One was that Hoover apparently believed that it lay in the power of government to change the business cycle. When consumption fell, he cut taxes and raised spending, infuriating business and depressing investment at precisely the wrong moment. Another was the Smoot-Hawley Tariff. This was a blow to trade which was already faltering.

A case can perhaps be made that interventionism made the Depression far worse than it would have been. I don't know. But sarcasm isn't a counter-argument.

[PaulO]

Man, I love Paul Krugman.

A liberal who's not a wimp.

Why (oh why) can't we have more of them?

[Carol]

David, I think Hoover's actions were trying to stave off the great depression, since people in those days probably remembered the depression at the end of the 1800s which was pretty bad too. They feared that country wouldn't be able to handle another depression, and the concern about union rebellions and anarchists was pretty rampant. The rich were already hiding in their gated estates with machine-gun armed guards when the stock market crashed, and no one did much to stop the downward spiral. One reason, of course, is that the depressions actually benefit the established rich, if they are short enough. The issue here, of course, is that we did not pull out of it until WWII, which was probably the financial catalyst for the real recovery into the 50s, although the New Deal was at least better than no deal at all.

Sarcasm just is a way of laughing at folly.

[Buce]

Be fair, now. Krugman would make a dreadful game show host.

[lise]

David, sorry, but you are quite wrong. Spending was miderately raised between 1930 and 1931 while tax rates were doubled. The Smoot-Hawley tariff was added. The policies of Herbert Hoover and the Republican Congress proved a disaster. Fortunately Franklin Roosevelt was elected along with a Democratic Congress and as the New Deal was shaped and implemented the economy began to recover.

[Richard Cownie]

Krugman misunderstands: a "limited background in economics"
means that as someone who *knows* economics, you are "limited"
to remaining in touch with reality, rather than spouting
whatever crap suits the current right-wing politics. Compare to
treatment of State Department Arabists by the neocons; they
also had a "limited background" in thinking about the future
of Iraq, which prevented them from envisaging the flower-strewn
entry into Baghdad and the erection of huge statues of W throughout the land.

Rightwing punditry has really jumped the shark.

[lise]

"miderately" is really really "moderately"

[radek]

Yeah, this is the one where Ben Stein establishes himself as most definetly an ignorant hack.

[spencer]

Paul your points are valid -- But I do not think my argument that investors would have anticipated a boom
were any more sarcastic then yours about investors anticipating the new deal.

But my comments were on the new deal and the 1930 tariff had nothing to do with that.

the point that we did not pull out of the depression until WW II is just a reflection of how far we fell in 1930-33. From 1934 to 1939 real GDP growth averged 12%, but that is what it took to get back to where we were in 1929.

Remember it takes a much larger percent gain to offset a given percent decline. If a stock falls from $100 to $50 that is a 50% loss. But for the stock to get back to $100 it has to increase 100%.

[Maureen Hay]

I remember a TV interview with Ben Stein which showed a clip of him in the audience openly weeping when Nixon announced his resignation to the White House staffers. Quite a boggles the mind moment.

He also does little pieces on CBS Sunday morning. There was one which was one of the creepiest things I've ever seen on TV. It was on the "real America." He spoke of the lake in Idaho where he vacations. Pictures of rich, pretty, white children swimming and diving in a pristine lake, while Ben intoned about the neighborliness, the lack of "gangs." Ben, it's a FRICKIN' RESORT COMMUNITY. It is made and designed to be lovely. People are happy and friendly because they are on vacation with other rich people and don't have to deal with the riff-raff. And where has Ben Stein ever dealt with gangs? Bethesda? Could he just be honest and say Blacks and Hispanics? And Ben - you're Jewish and going on about the joys and beauty of Idaho - prime white supremacist country. Not a slur on all the people of Idaho, but Ben seems remarkably clueless here.

Idiot.

[BC]

But Ben Stein played the droning science teacher on "The Wonder Years". He may be a bitter, pathologically misinformed two-bit poseur not fit to polish Krugman's keyboard, but for the droning science teacher we will always be grateful.

[lise]

Despite New Deal programs being fought and fought, there was a substantial recovery of the economy by 1936. The problem came when the Federal Reserve began to raise interest rates, and a recession began in 1937 and extended into 1938.

[slamra]

Ben Stein is a dreadful game show host, maybe worse than Krugman would be, who can say, really? He was really a permanent contestant, who looked better than he was due to the selection of weak opponents, since "Win [his] Money" was no "Jeopardy!"

Jimmy Kimmel was the real host, and he actually has some talent. Note how quickly the show folded once he left.

[PaulC]

This page has been missing since at least December 4, 2003, according to the Internet WayBack Machine:
http://web.archive.org/web/*/http://www.americanenterprise.org/hotflash020314.htm

The most recent copy on that site is June 20, 2003. This does back up my conjecture that it was pulled in response to the following from early June 2003:
http://www.j-bradford-delong.net/movable_type/2003_archives/001609.html
The Financial Times Simon London has had lunch with Milton Friedmann, and discovers he has changed his mind about targeting the quantity of money, which is, as Stephen Roach notes ironic at a time when Bernanke and company would have things otherwise: 'Hold on to your hats and prepare to be amazed: Milton Friedman has changed his mind. "The use of quantity of money as a target has not been a success," concedes the grand old man of conservative economics. "I'm not sure I would as of today push it as hard as I once did." Granted, this is hardly a conversion of Damascene significance. But, heck, it's a start.'

Of course, it was still up for a while afterwards. It could have been up until December.

[Fundo the Clown]

How do I win Ben Stein's brain?

[kharris]

The commentary here is all about Stein's content, but isn't it his tone that really makes him seem, well, demented? Reading Krugman and then reading Stein's response, you get a kind of a jolt - don't let him near the kitchen knives. He responds like that to one great economist eulogizing another, for goodness sake. Where's the decorum?

The partial change of heart from Uncle Milton makes the whole thing kinda funny. Right in the middle of haranguing Krugman for being an economic quack (and getting every point wrong while doing it), Stein proves he doesn't really follow economics very closely. Lovely.

This is just more evidence of the echo chamber, I'm afraid. Stein's father would not have behaved like this, but he was a great economist and not beholden to an audience that has set aside truth for dogma. Ben is not a great economist and is beholden, and this is how he behaves.

[Crusty Dem]

The funny thing about this is that most of us have heard Stein lecture on the Smoot-Hawley Tariff and it's relation to the great depression. Remember Ferris Bueller's Day Off? The horrible, droning History/Economics teacher? "Anyone, anyone, Bueller?" That was Ben Stein.

Although my favorite line was "Something economics. Anyone? Something-D-O-O economics. Anyone? Voodoo economics."

He's a complete tool.

[Hedley Lamarr]

The Depression lingered long after FDR became president. I thought what ended it was good old fashioned Keynesian fiscal policy with government spending tons of money on WWII. Until that happened, FDR did what all good leaders should do; he put people to work, and when war came he call for broad sacrifices by all citizens.

[howard]

Patrick, just how do you get from these words:

"Just to start, you say the great depression was 'widely blamed' on laissez faire policies. By whom? It has been blamed on many things, but no serious scholar has blamed it on free market economics. In fact, just the opposite--many blame it on price fixing and restraint of trade encouraged by the New Deal."

to your notion that Stein didn't say the New Deal "initiated" the great depression. what else does "many blame it on" possibly mean?

As for the economy, real GDP growth occurred in '33 - '37, fell off in '38, and then resume in '39 and, of course, during world war ii.

Now, perhaps in some test-tube parallel universe the New Deal extended the Great Depression, but here in the real world, the New Deal at the barest minimum didn't keep the economy from growing in 6 of the 7 years of the '30s that FDR was in office.... (http://www.bea.gov/bea/dn/gdplev.xls)

As for "laissez fare" policies, that is not, of course, the same thing as "free market economics," and no "serious" economist would claim otherwise.

[howard]

PS. Patrick, if you're going to cite the prof, you might want to indicate that you've read the footnotes:

"there are (a few) people who believe that the Great Depression was caused by the fact that the Federal Reserve did not deflate the American price level back to its pre-WWI level in the 1920s, or who blame the Great Depression on the Smoot-Hawley Tariff or the New Deal. The tariff certainly didn't help, but it was a minor factor. Some elements of the New Deal retarded recovery (and others accelerated recovery), but the Great Contraction was completely over when Roosevelt's 100 Days began."

[deaconblues]

Remember when Ben Stein was going to get his own talk show on Comedy Central?

I vaguely remember the commercials implying that he was overrun with groupies.

At his age.

[anne]

The Depression was at a nadir when Franklin Roosevelt became President, and from the general confidence in Roosevelt from the beginning to program after program the economy began to grow with Roosevelt, and grew at a rapid clip till the poorly judged tightening by the Federal Reserve that led to recession in 1937. There is a reason why Roosevelt was so vastly popular, so popular to this day that Ronald Reagan repeatedly referred to Roosevelt to link program initiatives.

The New Deal was a vast success, essentially fostering a middle class America. Attempts to deny history to get at Roosevelt now are shameless attempts to end the legacy of the New Deal in the hope that too many have finally forgotten what it meant for America.

[spencer]

When I studied the depression of the 1930s I learned that the cause was primarily monetary.

The 1930s era is called the depression, but it consisted of two recession separated and followed by periods of strong growth. If you do a trend line of real GDP from 1900 to 2000 you find that real GDP
got back to the long run trend in 1940.

The end of the first recession was in early 1933. The history I learned and that the NBER dating convention uses is that the end of the massive 1929-33 recession was Roosevelt's bank holiday soon after he took office.
From 1934 to 1944, even including the 1938 recession real GDP growth averaged 10%, the strong decade of growth in US history.

Now Sullivan, how do you explain the strongest decade of growth in US economic history as a period when the new deal was prolonging the depression?

I know, you explain it the same was you credit the 1990s boom on the Tax cuts under George Bush.

[a different chris]

Well, once you become a passionate Nixon-defender you've cleared the shark by such a height that tying a 1929 effect to a 1933 cause is really not a big deal.

[marquer]

Oh, my, that bit about the New Deal engendering the Depression is priceless. I've had to hold my nose through a lot of Ben Stein over the years, but had not encountered that before.

Something occurred to me this week, in the aftermath of Stein having trashed Mark Felt's character, to wit: Stein was, notoriously, a White House speechwriter during the Nixon years.

Per his official biography, Stein would have been around thirty years of age when Nixon quit. He would have been turning 21 right around the time that LBJ was sending the first big troop deployments into Vietnam. Yet, our Ben leapt not to the cannons' roar. "Other priorities," no doubt.

I also note that he has a son, of whom he is demonstrably fond, having written a couple of cheesy paeans to the joys of fatherhood in _The American Spectator_ and elsewhere. Nothing wrong with that per se; parents should cherish their children. Mawkishness is preferable to neglect.

However, given how ardent Stein was and has been in promoting the current war, and how quick on the trigger he was to send other parents' kids out to get shot and killed in Iraq, one must wonder -- will he urge his precious Tommy to enlist in the Marines upon the lad's turning 18 next year? Will Stein blood be spilled in the dust as part of the great civilizational crusade that Ben has talked up relentlessly? Somehow, I doubt it.

[spencer]

Patrick Sullivan-- Ok, I am an old man. I learned to be an economic analyst in the 1960s at that great bastion of left wing fools, the CIA . But, what I was taught there has stuck with me over the years. The motto was "You Shall Know TheTruth, and The Truth Shall Make You Free."

I run across you at numerous web sitse. It is interesting, I have never seen a single fact you claimed in support of your economic philosophy that turned out to be correct. Constantly, every where I encounter you I am able to quickly and easily demonstrate that essentially every statement you make is factually incorrect.

Doesn't it bother you at all that you constantly have to lie to support your economic philosophy? If what you believe is so good, why do you have to constantly lie to support if? Shouldn't the truth serve?

[marquer]

Following up on my own post:

Stein obviously didn't volunteer for Vietnam, but I found myself wondering whether he had utilized one of those transparently entertaining means of deferment common to GOP chickenhawks of the era (such as the trick knee bravely suffered by fellow Nixon speechwriter and later avid jogger Pat Buchanan).

I wasn't able to dig up anything about Stein's draft status, but did find, bizarrely enough, a comment to the effect that he had been a protestor *against* the war while he was at Yale Law.

To go from that to being a Nixon henchman? Damn, that is one of the fastest and weirdest and most complete transformations in the history of twentieth-century American politics. Shades of David Horowitz. Or of Lyndon LaRouche.

[Kimmitt]

Dunno if it's relevant, but I have a lousy knee and I ride my bicycle regularly. I wear a knee brace, and I'm probably a lousy candidate for military service.

[Patrick Haines]

Patrick R. Sullivan replied (below) to the following::

"Fortunately Franklin Roosevelt was elected along with a Democratic Congress and as the New Deal was shaped and implemented the economy began to recover."

Yeah, about 1940. The New Deal started in 1933, and very clearly prolonged the Depression.

Patrick R. Sullivan: Prove this assertion.

[God]

How do I win Ben Stein's brain?

Posted by: Fundo the Clown | June 6, 2005 12:03 PM
****************888

I'll give it to you. You just have to supply the walnut shell to carry it home in.

[Dustin Ryan Ridgeway]

I think it's well established, even among liberal economists (by liberal I am referring to the American sense) that it was ultimately World War 2 which pulled the USA out of the Great Depression. The New Deal prevented the Depression from getting worse but didn't neccessarily pull us out.

I must admit, reading that letter by Stein a second time, it comes off much less shrill than when I originally read it. It's possible that I'm just struck by Ben Stein, who once asserted that the Democratic party has no honorable history, conceding that both parties have been well intentioned.

As for Monetarism, if I recall the Professor has a much higher opinion of it than Mr. Krugman; and apparantly even Uncle Milton himself.

[obscure]

spencer to patrick sullivan:

#Doesn't it bother you at all that you constantly have to lie to support your economic philosophy?#

I don't know if it bothers him, but I do believe that his principle criterion for belief is not observation so much as desire.

[cymack]

"...And surely he didn't really study economics at Yale? If I were them I'd be sueing for the collateral damage he's causing."

Patience, rjw, patience ... Bush first!

[howard]

Patrick, i checked your link. it tells us nothing. if you would care to link us to the research itself, and to any scholarly commentaries, and indeed to how these two economists knew that wages were above what they should have been or any of the other assertions they make, then conceivably there is something to talk about, although i sincerely doubt it.

As for the prof, let's see: we have here Patrick (and 2 professors from UCLA) claiming that: "The New Deal started in 1933, and very clearly prolonged the Depression" and we've got the prof saying, in his footnote: "Some elements of the New Deal retarded recovery (and others accelerated recovery)." The Great Contraction (which i do understand, thank you very much) enters into the prof's sentence, but not in a way relevant to this discussion.

And of course we have the problem of explaining how real GDP growth prolonged the Depression....