Sunday, August 5, 2012

Paul W. McCracken, Adviser to Presidents, Dies at 96

Paul W. McCracken, who served as an economic adviser to both Republican and Democratic presidents, has died.

A Keynesian totalitarian crackpot, who was a typical operative used to expand government, McCracken promoted the idea that government should play an active role in moderating business cycles, balancing inflation and unemployment. In the process, he was a key player in an early on wrecking of the economy.
In 1969, Murray Rothbard wrote of McCracken:

All current schools of economists have the same attitude. Note, for example, the viewpoint of Dr. Paul W. McCracken, the incoming chairman of President Nixon's Council of Economic Advisers. In an interview with the New York Times shortly after taking office [January 24, 1969], Dr. McCracken asserted that one of the major economic problems facing the new administration is "how you cool down this inflationary economy without at the same time tripping off unacceptably high levels of unemployment. In other words, if the only thing we want to do is cool off the inflation, it could be done. But our social tolerances on unemployment are narrow." And again: "I think we have to feel our way along here. We don't really have much experience in trying to cool an economy in orderly fashion. We slammed on the brakes in 1957, but, of course, we got substantial slack in the economy."
Note the fundamental attitude of Dr. McCracken toward the economy — remarkable only in that it is shared by almost all economists of the present day. The economy is treated as a potentially workable, but always troublesome and recalcitrant patient, with a continual tendency to hive off into greater inflation or unemployment. The function of the government is to be the wise old manager and physician, ever watchful, ever tinkering to keep the economic patient in good working order. In any case, here the economic patient is clearly supposed to be the subject, and the government as "physician" the master.
It was not so long ago that this kind of attitude and policy was called "socialism"; but we live in a world of euphemism, and now we call it by far less harsh labels, such as "moderation" or "enlightened free enterprise." We live and learn.

And in 1971, just before Nixon imposed full-fledged price controls, Rothbard warned:
Thus, we have Paul McCracken and Arthur F. Burns, dedicated opponents of wage-price 'guideline' dictation and wage-price controls when out of power, now moving rapidly in the very direction they had previously deplored . . .the Administration has swung around to the Liberal thesis of monetary fiscal expansion to cure the recession, while yelling and griping at labor and employers not to raise wages and prices - a guidelines' o r 'incomes' policy that is only one step away from wage and price controls . . .
What was the result of McCracken's advice? NYT explains quite well what he achieved while a White House adviser during the Nixonian period:
His nearly three years at the White House coincided with a turbulent era marked by rising deficits, rampant inflation, the imposition of wage and price controls, and the breakdown of the system of fixed exchange rates that had governed the world’s currencies since World War II.

 McCracken was also a member of the Council of Economic Advisers from 1956 to 1959 under President Dwight D. Eisenhower. While a professor, McCracken served two Democratic presidents: John F. Kennedy, as a member of a task force on the domestic economy, and Lyndon B. Johnson, as part of a commission on budgetary accounting. And then, Nixon named him chairman of the Council of Economic Advisers after winning the 1968 election.

While head of the CEA, McCracken also called for other types of meddling with the economy, including expanding unemployment insurance, reorganizing work force training, exempting the poor from federal income taxes and improving mass transit


  1. Pissing on graves hasn't superseded funerals because?

  2. "A Keynesian totalitarian crackpot"

    Wow, I hope you don't get to write MY obit!!!

    Well, at least I'm not Keynesian....