Good Guys and Bad Guys
LEKACHMAN, ROBERT
Good Guys and Bad Guys THE ECONOMICS OF THE POLITICAL PARTIES By Seymour E. Harris Macmillan. 382 pp. $7.00. Reviewed by ROBERT LEKACHMAN In economic affairs is it really possible to tell...
...He does moderately well with the Republicans and moderately badly with the Democrats...
...It is sad that the Democrats are not as good as their admirer believes them to be...
...With this major reservation, Harris makes a good case against the Republicans...
...Harris makes the usual political allowances...
...If the President had devoted the same effort of public education to fiscal policy as he has lavished upon the inflated Trade Expansion Act, unemployment might be lower and economic growth more rapid now and in the future...
...Congress is difficult, the public requires education in correct economics, and the recession has been too mild to jar anyone into action...
...They are comparatively unburdened by ideology...
...Harris is least persuasive in his attempt to distinguish Republican from Democratic fiscal attitudes and actions...
...In all three instances, a President only reluctantly recognized the extent of unemployment, overemphasized the momentum of recovery, and refused to embrace the truly effective therapies of public spending and tax reduction...
...On the record Democrats have been more attached than Republicans to public housing, Social Security, minimum wage legislation, unemployment compensation, medical research, health insurance and the other elements of social welfare...
...At present he acts as Senior Consultant to the Secretary of the Treasury...
...My sympathies over the years," he confesses, "have been with the Democratic party...
...Unfortunately, the usual answer also can be made: When a Democratic President affirms his attachment to balanced budgets, who is going to educate Americans into a comprehension of what economists have known for a generaion...
...But by the author's own telling, Kennedy hesitates to expand the Federal budget, backs longrange over counter-cyclical policy, and prefers to attack unemployment with such inexpensive devices as manpower retraining rather than by more costly efforts to expand total demand...
...His argument is strongest on social welfare...
...Harris attempts to demonstrate that the Republicans are intellectually backward and socially retrogressive, and that the Democrats are intellectually advanced and socially enlightened...
...As he identifies these principles, they include a determination to spend as little as possible, to spend as slowly as possible, to shift as much of the burden as possible to the states and the localities, to substitute insurance for subsidies, and to favor private over public action...
...But Harris fairly admits that, fortunately for the country, Republican practice failed to coincide completely with Republican principles...
...Professor Seymour Harris of Harvard has almost unique qualifications to essay an answer to this question...
...And while it is true that during the 1958 recession Eisenhower vetoed the tax cut which both his chief economic adviser, Arthur F. Burns, and his Vice President, Richard Nixon, strongly urged, it is equally true that he allowed a countercyclical deficit to emerge from the reduction of tax receipts and the maintenance of public expenditures...
...The Republicans are as bad as he paints them...
...Reviewed by ROBERT LEKACHMAN In economic affairs is it really possible to tell the Democrats from the Republicans...
...Yet if Keynesian economics contains a single lesson for the politician, it is this one: The remedy for unemployment lies essentially in the stimulation of the total incomes out of which comes the total demand for goods and services...
...A devotee of countercyclical action would have applauded the tax cut of 1954, even though the Republicans advocated it rather as a stimulus to private enterprise than as a planned deficit...
...In sum, Professor Harris has distinguished Democrats from Republicans...
...The President and his advisers are young, intelligent and alert...
...In Harris' eyes, "The Democrats represent the little man...
...More recently, he has appeared as an expert witness before Congressional committees on the average of five times a year...
...The extreme instance of the last principle was in Oveta Culp Hobby's bungling distribution of the Salk vaccine...
...At the moment, however, it is this prospect rather than any sharp contrast in economic performance, which distinguishes Democratic from Republican fiscal practice...
...In 1954, '55 and '56 he advised Adlai Stevenson, and during the 1960 Presidential campaign he was prominent in the Kennedy councils...
...Since 1941, he has been a consultant to a dozen Federal agencies...
...Hence it is not astonishing that President Kennedy's evaluation of the 1960 recession was distinguishable in only minor respects from President Eisenhower's response to the 1958 setback, or, indeed, from President Truman's reaction to the 1949 contraction...
...It is an exaggeration to label the present Administration as the third Eisenhower Administration, as some impatient critics have already proceeded to do...
...As these affiliations imply, Harris is openly partisan...
...And insofar as sense could be made of President Eisenhower's rambling pronouncements, he too adhered to the simplicities of pre-Keynesian economic morality...
...He does less well in his defense of the Democrats...
...The fiscal orthodoxy to which the President and his Secretary of the Treasury adhered in principle would have implied either a tax rise or an expenditure drop...
...The discrepancy was most glaring in the treatment of economic recession...
...The present volume is designed to amplify this simple judgment of what demarcates Republicans from Democrats...
...After refreshing one's memory of George Humphrey's primitive faith in balanced budgets, private enterprise and local responsibility, and his evangelical hatred of the sins of counter-cyclical economic policy, effective Federal government and national welfare programs, it is hard not to accept Harris' conclusion that the principles of public finance accepted by almost all responsible economists had not the slightest impact upon the rock-like convictions of the former chairman of M. A. Hanna...
...Harris is equally effective in his linkage of this ideology with the principles which guided Republican social welfare proposals...
...Whether the topic is monetary and fiscal policy or social welfare, the Republicans fare badly and the Democrats come off relatively well...
...There is always the prospect that such men will learn from their own experience, if not from their predecessors...
...What can be said on his side is this: President Kennedy shows many signs of understanding modern economics, his advisers are members of the Keynesian majority among American economists, and even his Secretary of the Treasury has openly declared that budget deficits are advisable during recessions...
...Along with J. K. Galbraith, Paul Samuelson, and Arthur Schlesinger Jr., Professor Harris strongly influenced the President's selection of key economic officials, not excepting C. Douglas Dillon, the present Secretary of the Treasury, of whom Professor Harris thinks most highly...
...As much as from any other source, this sympathy appears to flow from simple considerations of social justice...
...Harris' own computations support this conclusion...
...He was one of the signers of the Kennedy task force report on the state of the economy...
...the Republicans, the more affluent members of society...
Vol. 45 • September 1962 • No. 19
