Wednesday, July 14, 2010

Is It Time for Geithner to Diss the President?

Of course, it is! Jerry O'Driscoll writes:

Amity Shlaes has written an enlightening op ed on “FDR, Obama and ‘Confidence’” in today’s Wall Street Journal. She details how FDR destroyed investor confidence in the 1930s by his incessant attacks on business and businessmen, and by his policy inconsistency.

Treasury Secretary Morgenthau at first served as FDRs “yes” man and cheerleader.  But he came to realize how destabilizing FDRs actions were. The Treasury Secretary began resisting his boss’s policies.  She writes that Morgenthau “found an unlikely supporter” in John Maynard Keynes. Keynes wrote a critical letter to FDR about his persecution of utilities. “What’s the object of chasing them around the lot every other week?”

Market confidence returned when FDR concluded he needed to make allies of business once he decided he needed to plan for war. She concludes: “Perhaps Mr. Geithner might like to read up on Morgenthau’s progress.  Treasury secretaries who forget the past condemn us all to repeat it.”


  1. I didn't like this JOD post at all. The way FDR made "allies" of business was through fascist policies and institutions like the NRA, efforts led by Bernard Baruch and other state-industrialist luminaries. The fact that Keynes, a proto-fascist late-mercantilist, signed off on all of this by scolding FDR for his "anti-business" antics is even more proof that this was a dangerous development in politics and economics during that era.

    In other words, I wouldn't quote a person like Keynes to make an "even KEYNES was against this type of intervention" because Keynes was NOT against that type of intervention. Let's not forget Keynes was fascinated with fascist Italy and Nazi Germany and believed that totalitarian countries like that would be the best places to implement his economic policies.

  2. RW - Thats the second time in the past week that I have read in the news that a "plan for war" would be good for the economic/political crisis in the U.S. This is dangerous and faulty thinking. O'Driscoll should know better.

  3. I too am seeing an uptick in facebook traffic among my "conservative" facebook friends that are obsessed with "restoring confidence" in the economy while ignoring major fundamental and structural problems. And for most of them this means the government should be spurring more spending, as if we're suffering from a problem of not enough consumer spending.

    I also see many more references to war being good for the economy.

    In my opinion, the brightest minds in economic thinking (like Wenzel) need to be as careful/crystal clear as they've ever been when expressing their excellent views. Too many conservative citizens still think credit/spending is the lifeblood of the economy...and war is stimulative/good for the economy (and ended the Great Depression)...and the government needs to stimulate 'more properly' to kickstart the economy.