Wednesday, February 18, 2009

Does Eric Cantor Heart the Economic Consequences of Mr. Churchill?

Josh Marshall says he is a big Winston Churchill fan but doubts that Republican House Whip Eric Cantor knows much about Mr. Churchill’s political career. Josh makes this claim after reading this:

But Rep. Eric Cantor (Va.), the House minority whip who led the fight to deny Obama every GOP vote for the plan, is studying Winston Churchill's role leading the Tories in the late 1930s, a principled minority that was eventually catapulted into power over the Labor Party. He calls the stimulus bill "a stinker."

Should we remind both of them about a piece Lord Keynes wrote in 1925 entitled The Economic Consequences of Mr. Churchill? Churchill as Chancellor of the Exchequer had the British pound return to the gold standard after the First World War at too what turned out to be too high of a value. Keynes correctly predicted adverse economic consequences. British macroeconomic policy during this period also was the kind of macroeconomic mix the U.S. saw in the early Reagan years – tight money combined with tax cuts. The prices of British exports such as coal and textiles became uncompetitive on world markets leading to deflation and unemployment. As Keynes predicted, this strong pound policy also caused a trade deficit. The Reagan macroeconomic mix also created a fall in net exports, which contributed to the 1982 recession.

Churchill later recognized that the 1925 return to the gold standard was a mistake. One would think that U.S. Republicans would recognize that had we chose to repeat Herbert Hoover’s policies, we would be making an even greater economic mistake. But then Eric Cantor hearts Churchill’s leadership during this period. Go figure.


Jack said...

Mr. Cantor is not reacting to an intellectual understanding of the past actions of highly regarded leaders. He is, instead, searching for support for his reactionary attitude regardless of how tangential to the current circumstances they may be. It is no steretch of the imagination to assume that one can hitch their wagon to historical luminaries and assume that no one will look into the details of the analogy that one seeks to foster. What Mr. Cantor hopes for is a recollection of Churchill's luster as a leader in time of war rather than an in depth analysis of Churchill's earlier governmental activities, which were far less lustrous. Mr. Cantor is looking for some luster to enhance his bluster. Just a little more obfuscation of the past to justify his reactionary behavior in the present. It's unfortunate that he is not exposed for the historical dilettante that he is by more widely read media.

kevin quinn said...

One word: Gallipoli

Shag from Brookline said...

Eric's namesake (Eddie) could at least sing, dance and make us laugh. Maybe Eric smokes cigars and drinks heavily in his efforts to emulate Winston.