Bad Policy, Bad Politics

Galbraith vs. Galbraith

Richard Parker, John Kenneth Galbraith: His life, his politics, his economics p. 532-3: "In virtually every respect, from Galbraith's point of view, Humphrey-Hawkins represented the worst of liberal remedies... (Leon Keyserling was among the bill's most vocal proponents, because, as Galbraith quipped, it was 'all Keyserling and no Keynes.')... To Galbraith, Humphrey-Hawkins was a mistake from the start, not only bad policy but bad politics."

Jamie Galbraith, introducing Bruce Bartlett: "Bruce was a resolute supply-sider, having drafted the Kemp-Roth tax cuts. I was a resolute Keynesian, who had helped draft the Humphrey-Hawkins Full Employment Act. His specialty was taxation, mine was monetary policy. We were both twenty-nine years old."

Keyserling vs. Keynes

Casebeer: "In your view was [the Black thirty-hour bill] a misguided approach to recovery?"

Keyserling: Yes, because I didn’t believe in sharing unemployment instead of creating jobs. The thirty-hour bill was an attempt to share unemployment by having a lot of people unemployed ten hours per week instead of a smaller number of people unemployed full time. My opposition to the shortened workweek has gone much further. When I was working closely with Walter Reuther many years later, when he was one of the main financial supporters of the Conference on Economic Progress, the labor movement started developing support for a shorter workweek, and Reuther asked me to help him oppose it. He said he just didn’t believe that the solution to the unemployment problem was shortening the workweek. He said we ought to have a shortening of the workweek only when we came to prefer more leisure rather than more work, and when we were productive enough to justify that, and our production needs were more fully met. But as an employment measure, he opposed it. Later, when we had so many recessions and so much unemployment, the labor pressure for a shorter workweek became so insistent even within the ClO, and later within the AFL-CIO, that Reuther stopped actively opposing it because it was futile, but he never actively supported it.

Keynes

"...the full employment policy by means of investment is only one particular application of an intellectual theorem. You can produce the result just as well by consuming more or working less. Personally I regard the investment policy as first aid. In U.S. it almost certainly will not do the trick. Less work is the ultimate solution (a 35 hour week in U.S. would do the trick now)."

"As the third phase comes into sight... say 10-15years after the end of the war, when investment demand is so far saturated that it cannot be brought up to the indicated level of savings without embarking upon wasteful and unnecessary enterprises... It becomes necessary to encourage wise consumption and discourage saving, --and to absorb some part of the unwanted surplus by increasing leisure, more holidays (which are a wonderfully good way of getting rid of money) and shorter hours."