Martin Feldstein Has Died

Martin Feldstein (1939-2019)

Martin Feldstein, the former chairman of the Council of Economic Advisers during the Reagan Administration, has died at age 79.

Although a Keynesian economist (which to me means a bad economist), I called him my favorite Keynesian economist since he at least followed trends in money supply growth when few now do.

Once in San Francisco at a conference, I asked him what the current money supply growth rate was, to my amazement he knew. I doubt that many Keynesians would be able to do that now. Indeed, in Fed official monetary policy statements, it has been more than a decade since money supply has even been mentioned. (Far different from the time when Fed chairman Paul Volcker targeted money supply).

The best way to think of Feldstein is as an establishment conservative, there is not a lot to cheer but he was better than the rest.

Indeed, he goes out with his last penned Wall Street Journal op-ed appearing on March 20 of this year. Parts of the commentary (though not all of it) can be cheered loudly:

The most dangerous domestic problem facing America’s federal government is the rapid growth of its budget deficit and national debt...To avoid economic distress, the government either has to impose higher taxes or reduce future spending. Since raising taxes weakens incentives and further slows economic growth—worsening the debt-to-GDP ratio—the better approach is to slow government spending growth.

I can't think of better words that a Keynesian could go out on.

Rest in peace, Marty.

-RW