Amity Shlaes: A Public Service Reminder

by Henry on November 10, 2008

I’m a bit worried that in all of the pouring of cold water on assorted spanking fantasies in: re unemployment during the Depression, people are losing track of the main point that needs to be hammered home: that Amity Shlaes is an unscrupulous hack. Readers may need to be reminded of her final two op-ed columns before her inglorious and swift departure from the pages of the Financial Times.

First, on September 1 2005.

the fact that the country and President Bush personally were already mobilised for disaster has saved lives. … , among Mr Bush’s advisers were federalists who deplored the concept of expanding Washington’s power. They recognised that weather emergencies, like wars, often provide the excuse for just such expansion. Faced with a Katrina in the summer of 2001, the president, thinking as a federalist, might have been slower to call for Washington’s intervention. He might have said: this is a job for Kathleen Blanco, the governor of Louisiana. With a little help from Washington. And that, alas, probably would not have been sufficient.

September 11 changed Mr Bush and the country. Many of Mr Bush’s critics remarked that he looked like a deer in the headlights in that moment at the primary school when aides first whispered to him the news of the aircraft hijackings. But Mr Bush grew into a new role of leader in emergencies, and so did the federal government. … But Mr Bush grew into a new role of leader in emergencies, and so did the federal government. In addition to its old Federal Emergency Management Agency, it created the Office of Homeland Security to co-ordinate local, state and federal responses.

… The level of preparedness for a giant storm may not have been obvious outside the country, filled as it was the London bombings and the constitutional challenges in Iraq. But the US was prepared for Katrina. All the old and new federal offices worked together and confronted the storm early. … Nearly two days before Katrina hit New Orleans, the president made millions available to Louisiana by declaring the state an official disaster area. In a press conference on Sunday morning, he instructed the country to listen for any alerts – and warned straightforwardly that he could not “stress enough the danger this hurricane poses to Gulf coast communities.”

Second, on September 11 2005.

Incompetence has been the word used the world over to describe the rescue from Hurricane Katrina. The US Federal Emergency Management Agency and its parent, the new, giant Department of Homeland Security, did not respond fast enough. … There was hesitation. That hesitation at times represented incompetence. But it was also something else: what we might call the Federalist Pause. … The habit of the pause goes back more than two centuries, to the founding fathers. … President Calvin Coolidge paused – and decided the flood was not the president’s job. To manage the rescue he sent Herbert Hoover – his own version of Rudy Giuliani, who got New York back to work after the attacks of four years ago. But that the Mississippi rescue was different from the sort expected today. Hoover, the commerce secretary, had no giant government checks cheques. His role was more that of brokerringleader than funder. He negotiated among states; his Red Cross drive raised $15m. illion. When Hoover needed something, he found private buyers donors or simply commandeered goods. …

Today the US federal government plays a much larger role on the national stage than it did in 1927. Yet some would like to see it even more powerful. They blame, in effect, the Federalist Pause for the hurricane deaths, pointing out that, even now, Fema is not supposed to be a “first responder” – it must wait for an invitation to act. … Still, to argue , retroactively, that President Mr Bush should have jumped into New Orleans like a crisis dictator is to superimpose a European sensibility on an American crisis. Mr Bush is commander-in-chief when it comes to war but, when it comes to disasters, he is still only a chief executive in a system of checks and balances. …

… As for the value of increased federal bureaucracy, a bureaucracy with a mandate larger than Herbert Hoover ever dreamed of – the Department of Homeland Security – is now getting failing poor marks for its Katrina rescue. New Orleans is a tragedy, but a larger tragedy still would be to sacrifice federalism in its name.1

The dissonance between these two columns, published within ten days of each other, is remarkable, even if one forgets the quite reprehensible cheerleading for Bush’s handling of Katrina in the first one (which garnishes its raw meat partisanship with repeated criticisms of Democrats for seeking to politicize the crisis). In the first, Bush is the Awesome Commander in Chief, Who Throws Concerns about Federalism to the Winds, Because the People Need Him, and Uses the Super-Duper Awesome Department of Homeland Security to Kick Some Hurricane Ass. In the second, Bush is the Leader whose Sobriety and Wisdom are Demonstrated by His Hesitance to Challenge the Federalist Dispensation Even in An Apparent Crisis, and are Borne Out by the Incompetence of the Department of Homeland Security.

It takes both chutzpah and a complete lack of intellectual scruples to be able to make two arguments that are so diametrically opposed to each other in such a short period. I’m not sure that even Bill Kristol in his McCain-Campaign-Advice mode could execute so swift and comprehensive a volte-face. I don’t understand why, say, Jon Stewart, has helped this hack along by inviting her onto his show as a purported expert on the Depression (yes – he invites Kristol too – but he treats Kristol as a political hack). You really shouldn’t trust a word that she says or writes before verifying it with three or four independent sources.

1 The online version of the column seems to be a potpourri of the English and US versions that got left over from the editorial process, with some resulting grammatical weirdnesses duplications of cognate words etc.

{ 32 comments }

1

dr. doctrine 11.10.08 at 4:07 pm

The hobgoblins of stupidity rear up at the FT. “Coolidge paused” is a pleasant way to express he couldn’t be awoke from his narcolepsy.

2

Dave S. 11.10.08 at 4:13 pm

I saw that Daily Show Shlaes interview too and was surprised that Stewart played it straight, as opposed to his almost casual demolition of Kristol later. The Kristol piece was actually uncomfortable to watch given the aggressive lack of self-awareness on display.

3

lemuel pitkin 11.10.08 at 4:14 pm

Can you please refrain from calling Megan McArdle to our attention, ever? I’d just about forgotten she existed and now I have to start all over again.

4

Delicious Pundit 11.10.08 at 4:35 pm

I don’t understand why, say, Jon Stewart, has helped this hack along by inviting her onto his show as a purported expert on the Depression (yes – he invites Kristol too – but he treats Kristol as a political hack).

Because it’s hard to make business funny (believe me), especially when your show is fitted out for political humor, so I’m guessing those guys are educating themselves on the fly. You’d think there’d be one history major in that overeducated bunch, though.

I should watch Colbert a little more; I suspect that his persona, and his Catholicism, will allow him to make a slyer critique of capitalism.

5

Tom Paine 11.10.08 at 5:32 pm

Amity Shlaes reminds me of a young female attorney, for whom I inherited the supervision thereof, and whose lack of (1) commonsense , (2) knowledge of the law and its basic principles, and (3) professional judgment left me more dumbfounded and appalled with each passing day. When I queried my boss as to how she ever hired this person to perform legal and legislative advocacy work, she replied that this young attorney was a a mandatory hire because of the political influence of her mother and could not be disnmissed. She also confided to me that the young woman had been dismissed from every legal position she had ever held. Then she went on to tell me that while Ms. ___ has supreme confidence in her knowledge of the law “she actually does not know what she thinks she knows, but she also does not know what she does not know.”

I give you Sarah alin and Amity Shales.

6

Randy 11.10.08 at 5:57 pm

I thought maybe Steward didn’t know she was a political hack until about halfway through the interview, when I thought I saw it dawn on him. He had already positioned her as an expert, so he couldn’t switch his approach in such a short interview. But I thought I saw a small wave of nausea.

7

Ben Alpers 11.10.08 at 6:57 pm

I’m no great fan of the Council on Foreign Relations, but how the hell did Amity Shlaes become a Senior Fellow in Economic History there? Heritage, AEI, Cato I’d get. But CFR? I always thought they had higher standards for creating an appearance of expertise.

8

grackle 11.10.08 at 8:24 pm

Isn’t Amity Shlaes a character in some Lemony Snicket book?

9

MQ 11.10.08 at 8:33 pm

The odious neocon Max Boot is also an “expert” at the Council on Foreign Relations.

10

roy belmont 11.10.08 at 8:42 pm

It takes both chutzpah and a complete lack of intellectual scruples…
Well boy gosh howdy it sure does. But then if intellectual rigor wasn’t part of her mandate to begin with, and the goal isn’t and never was to arrive at whatever objective truth might wait there to be revealed, but to further an agenda, an actual specific existing-in-the-real-world agenda, especially one that we dare not precisely speak to name… well then there now. Hey yup.
Is there a mystery here?
That hordes of incompetent pseudo-journalists continue to appear before us streaming nonsense and obfuscation, how can this be, and how can any editor worth an editor’s salary pass this dreck on to the public?
Is that the mystery?
Or is our inability to name more exactly what is obviously a concerted effort to advance that elusive agenda really the mystery?
Given the intellectual accuracy and firepower available to the task, why do we keep missing the target?
“And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors…and you, all of you, will be left to just study what we do.”

11

MQ 11.10.08 at 8:42 pm

Jesus, is the controversy really all about whether people who worked for the WPA should be counted as working? I see great WPA construction from the 1930s all the time that is still used today. WPA workers were a fuck of a lot more productive than the Megan McArdles and Amity Shlaeses of the world.

12

engels 11.10.08 at 11:05 pm

McArdle is basically a troll. Every time someone links to her, she wins.

13

Stark 11.11.08 at 12:45 am

The Daily Show interview was rather interesting because if Stewart brings somebody on the show he respects and wants to listen to, he will back off with some the goofiness and ask rather thoughtful questions. Within two minutes of his interview with Shlaes, however, it was clear to me at least that he really wasn’t interested in her diagnosis of the economy and made every question a joke. It has something to do with ‘making business entertaining’ I’m sure, but he’s paid a lot more attention to people in the past: Jeffrey Sachs comes to mind as one of the more intellectually stimulating interviews.

14

vivian 11.11.08 at 2:25 am

OT, but is there an Irish word for chutzpah? Or maybe something close? Because English needs as many synonyms as possible these days, and Ireland seems like a good place to look for some.

15

Randy Paul 11.11.08 at 2:26 am

What Lemuel Pitkin said. I have never understood why anyone takes Ms. McArdle seriously on such issues.

16

Katherine 11.11.08 at 8:24 am

Tom Paine @ #5 – how is her gender at all relevant to her political hackery? Unless I’m much mistaken, incompetence and idiocy are not exactly limited to the female gender.

17

Lex 11.11.08 at 8:33 am

@16: indeed, but let it not pass without remark that one of the unfortunate side-effects of letting vicious partisan hacks and self-interested incompetents who happen to be female have access to the teachings of feminism is that they can use it to position themselves as potential victims of anyone attempting to point out their hackery and incompetence. If Tom Paine was merely reporting, amongst other facts, that this individual was female, that ought to be no more than the truth. Since it has raised your hackles, the incompetent one has won that round. We are only fortunate that Sarah Palin’s attempt to do likewise was foiled by her truly egregious vileness.

18

Alex 11.11.08 at 9:21 am

It works like this: Blowing up a bridge in a pointless war of choice – work. Building one for the WPA – not work. Simplicity!

19

Michael Turner 11.11.08 at 11:49 am

In calling Shlaes an unscrupulous hack, I hope you realize you’ve broken a rule of political discourse laid down recently by none other than Kevin Hassett: always be someone your opponent would like to have over for dinner.

You should be heartbroken over this faux pas. What are your chances now of ever getting Kevin’s autograph on your dog-eared, magic-markered, “how true!”-margin-annotated copy of Dow 36,000? Zero, zilch, that’s what.

It’s not even that you’re being intolerably rude. As he astutely points out,

The truth is, the near-term future of this country depends more on Republicans than it does on Democrats.

So by pissing on their pet unscrupulous hacks, you’re making Republicans mad, and uncooperative, and therefore hurting the near-term prospects for America. Which hurts the long-term prospects for America. Which makes you a traitor. Unless you’re one of those meddlesome foreigners. In that case, you’d be a terrorist.

20

DC 11.11.08 at 12:15 pm

Here’s the John Stewart interview. Watched it at the time and she seemed quite likeable but distinctly odd. And Stewart calls her on some wingnutty ridiculousness (blaming LBJ for the present crisis for having taken the GSEs off the books):

http://www.thedailyshow.com/video/index.jhtml?videoId=187617&title=amity-shlaes

21

rea 11.11.08 at 7:21 pm

Can you please refrain from calling Megan McArdle to our attention, ever? I’d just about forgotten she existed and now I have to start all over again.

I think of her all the time–but then, I live next to a construction site with plenty of 2×4’s . . .

22

Questioner 11.11.08 at 7:43 pm

I’m no economist, and I’m no historian, so I may have misunderstood the debate between Lichtblau and Tabarrok, but I got the feeling the relevant facts are these:

Lichtblau thinks treating people employed by the WPA as employed makes sense, because they did real jobs.

Tabarrok thinks treating people employed in “make-work” schemes by the government gives you artificially low unemployment figures, and points out that later unemployment figures do not take such workers into account. Thus, for Lichtblau to be consistent, he should treat, say, unemployment figures under George W. Bush as lower than they are right now treated.

Tabarrok moreover thinks that if Lichtblau’s methodology were used, then the government could easily and always make unemployment zero–just hire everyone in America to do something useless.

Lichtblau responds that, even though WPA employees are employed by the government, they did real work, and so should definitely not be counted as unemployed.

I get the sense that there’s rightness with both Tabarrok and Lichtblau. I agree with Lichtblau that the WPA employees did real work, and so should be counted as employed. But I agree with Tabarrok (and, I think Lichtblau might even agree with this) that you have to be very careful about counting just any government employees as employed for the purposes of measuring a country’s unemployment, because then the government could get away with a lot. So coming up with unemployment figures is an art, though an art one should consistently apply, not just to FDR, but also to later presidents.

There’s also a separate issue, which is that the WSJ and Schlaes like to point to 1938, a years in which unemployment was 20%, to cast doubt on the efficacy of FDR’s policies. Lichtblau points out that unemployment was 20% only because the person on whose figures Schlaes and the WSJ were relying didn’t count WPA employees. That seems like an important point.

Lichtblau also points out, however, that unemployment had gone down steadily from 1933-1937, and that Schlaes, WSJ, and (I guess) Tabarrok discount this. But this raises the question of why unemployment rose so much from 1937 (14%) to 1938 (20%), even though we’re using the same methodology for determining unemployment. This is why Taborrok et al. say that Lichtblau seems to be committed to there being two great depressions, one starting in 1933 and one starting in 1938.

As Bill O’Reilly would say, Tell me where I’m wrong.

23

Hedley Lamarr 11.11.08 at 9:27 pm

On the News Hour recently, this woman struck me as being sightless. Or is she just dizzy looking?

24

Martin Bento 11.11.08 at 11:50 pm

Questioner, I don’t see any reasonable sense in which Tabarrok is right. The private sector is also capable of employing people to no good end, as with all the dot-commers hired by companies who crashed before they launched. We don’t judge those people as unemployed because their employment bore no fruit, and the WPA produced many things. As for the fear that this means the government could simply end unemployment by hiring everybody, possibly for meaningless jobs: rightly so. That would, as a point of fact, eliminate unemployment. Of course, it is likely to create other problems, and a cost/benefit analysis would have to be done, but the specific problem of unemployment would be taken care of, at least for that time. Keynes said the government in a depression could just spend money burying things and hiring people to dig them up, and it would still be better than doing nothing.

25

Alex 11.11.08 at 11:59 pm

As Bill O’Reilly would say

That’s where you’re wrong. This was a message from the department of simple answers to stupid questions.

26

The Navigator 11.12.08 at 1:33 am

Really – it’s O’Reilly who says that? I was pretty sure it was Walter Sobchek. And, of course, as even El Duderino conceded, he wasn’t wrong.

27

Chris 11.12.08 at 1:43 am

Keynes said the government in a depression could just spend money burying things and hiring people to dig them up, and it would still be better than doing nothing.

Specifically, IIRC, those people would draw paychecks, which means they would have money, which means they would buy things, which would stimulate demand. If the number of people actually productively employed was less than full production (which is pretty much the definition of a depression), this would (eventually, possibly by way of some inflation devaluing the wage of nonproductive work if you had set it too high) lead the wages of workers doing productive work to rise above the wages of workers doing nonproductive work[*], which leads to the abandonment of the nonproductive work.

Oh yeah, and also those people and their families don’t starve to death or lose their access to health care. Some people consider that a plus – it preserves your labor force for higher post-recovery productivity.

However, if you try this when you’re *not* in a depression, either your nonproductive job program is ignored because everyone already has better productive jobs, or you actually compete with productive jobs for workers, causing a bidding war for labor and eventually, inflation – but overall production doesn’t increase because it can’t.

Ultimately, hiring people for genuinely nonproductive work (which the WPA is emphatically not, as has been pointed out several times in this exchange) isn’t that different from just giving money to people with no job, except that it interferes a bit more with their job-seeking efforts and is therefore a slightly inferior approach. But only slightly. Ideally (from a pure size-of-the-economy view, with no particular preference as far as distribution) you want to give them somewhat less money than they would make if they had a productive job, but still enough for them to feed themselves and otherwise contribute to aggregate demand.

 
P.S. There’s no reason people working for the government can’t produce value, if the government engages in value-producing activity. The fact that we have a tradition of not doing that (much) under normal circumstances doesn’t prevent us from doing it under extraordinary circumstances, and certainly doesn’t make it theoretically impossible. Government is somewhat inefficient at value-producing activity, but that inefficiency might be less bad than nobody attempting the activity at all, if that’s the alternative.

 
[*] Unless you deliberately keep raising the wages on the nonproductive work to prevent people from abandoning it for productive work. But now we’re well into the territory of actively malicious attempts to wreck the economy; sure, you might succeed, but is that really relevant to the subject of depression recovery?

28

Michael Turner 11.12.08 at 7:01 am

Oh yeah, and also those people and their families don’t starve to death or lose their access to health care. Some people consider that a plus ? it preserves your labor force for higher post-recovery productivity.

This suggests a way we can all get along. What we do is set up a project — let’s call it the No Deal Counterfactuals Truth and Reconciliation Comission (NDCTRC) – that would, among other things, estimate how many more people would have died of starvation, of diseases made fatal by malnutrition or inability to afford health care, of being machine-gunned in protest marches on the White House turning ugly, of exposure from being homeless, of alcohol poisoning from being hopeless, etc., etc., if there’d been no New Deal.

The goal of NDCTRC would be to count the “laissez-faire economic recovery collateral damage” fatalities as “unemployed” for some number of years after their deaths, the number being subject to negotiation, calculation and careful economic modeling.

But just how does one estimate how long these notional dead should have been considered unemployed? I’d go for some estimate based on how many years they probably would have worked if they’d lived. But maybe that’s just my bias toward the New Deal talking. Those of certain other ideological persuasions are likelier than I to staff this Commission. They will undoubtedly prefer to base the estimate on how much shorter they believe the Great Depression would have been if nothing had been done, and on the assumption that it would have been possible to dig up dead people and size them for clean clothes suitable for interviews, to get them to fill out job application forms properly, to train them for new lines of work, and to make sure they understood that they would be unwelcome in polite society if they persisted in reproducing their own kind by chasing the luckier people who hadn’t died in the Lesser Great Depression down the street and biting them.

Of course, objections can (and very likely, will) be raised concerning the feasibility of this project, given how ideologically polarized even the No New Deal constituency is. Take the problem of ideal organization for the reconstitution of the “differently-viable” (don’t use the Z-word, please!) parts of the post-Lesser Great Depression workforce. Would it have been better organized as a government program? Or left to private sector? Or perhaps a faith-based program would have done the trick? I can see the whole NDCTRC formation process dissolving very acrimoniously over that one! With strong intellectual leadership, however, a philosophy of “let’s cross that bridge when we come to it” should prevail, great progress would be made, and this long, poisonous national debate could finally be brought to an amicable conclusion.

29

Matt Weiner 11.12.08 at 1:00 pm

Tell me where I’m wrong.

To begin with, the person who wrote all those posts is named Rauchway, not Lichtblau.

Also, this is false: “later unemployment figures do not take such workers into account.” Rauchway points out that the latest edition of Historical Statistics of the United States uses Weir’s unemployment series consistently.

Other points: Rauchway’s complaint about the WSJ writer is not that he discounts the drop in unemployment before 1938, but that he positively obfuscates it, by saying that unemployment “remained” at 20% in 1938, which isn’t true no matter what series you use (would he say that twenty-one years after the Armistice France and Germany remained at war?) And Krugman (and I think Rauchway) say that the recession of 1938 was caused by Roosevelt attempting to cut back on the New Deal.

30

Barry 11.12.08 at 4:19 pm

Michael Turner 11.12.08 at 7:01 am

“This suggests a way we can all get along. What we do is set up a project—let’s call it the No Deal Counterfactuals Truth and Reconciliation Comission (NDCTRC) – that would, among other things, estimate how many more people would have died of starvation, of diseases made fatal by malnutrition or inability to afford health care, of being machine-gunned in protest marches on the White House turning ugly, of exposure from being homeless, of alcohol poisoning from being hopeless, etc., etc., if there’d been no New Deal.”

There are certain beliefs whose holders are reasonable judged to be ignorant, foolish or lying with evil intent. On another blog, I posted a comment that believing the phrase ‘Social Security is a Ponzi scheme’ is such a belief.

By now, ‘FDR prolonged the Great Depression [through implementing New Deal policies, as opposed to not implementing a stronger New Deal, and not backing off later on]‘ is also such a belief. In the case of an economics professor, holding such a belief is an automatic conviction of lying with evil intent.

31

Martin Bento 11.12.08 at 7:35 pm

Chris, although I agree with everything you said amplifying my point, I would like to point out again that the private sector also employs people for useless work, and even some of the useful would seem to contribute much less real value to the economy that is consumes labor (e.g., advertising. One company’s success is another’s failure, since ads are almost always seeking share rather than total market growth, save perhaps in new markets, It may be that the totality of advertising leaves the public better informed, but that’s debatable, so it couldn’t be a huge effect. ) Of course, the private sector does not deliberately employ people for work that is useless to the enterprise, but the usefullness to society can be much less than the usefullness to the enterprise: sure markets create efficiencies and find positive-sum games, but there are also zero-sum games afoot, and some success has to come at the cost of another’s failure, which will be a wash from the standpoint of the overall economy (Coke and Pepsi can have an ad war, and one can benefit, primarily at the expense of the other. The benefit society as a whole gets from this, while there is some (if only in the other enterprises advertising subsidizes), is not a function of the expenditure. ). The government, however, can use labor directed deliberately to the general good. This, of course, is a classic argument for soci@lism, but it does seem that socialism needs to be counterbalanced by capitalism to retain proper feedback loops. But there are efficiences as well as inefficiencies to soci@lism) (Weird typography an attempt to escape moderation, which is triggered by a substring of the “s” word. )

32

Michael Turner 11.13.08 at 2:17 am

There are certain beliefs whose holders are reasonable judged to be ignorant, foolish or lying with evil intent.

But . . . these days, don’t you have to take a test to make sure you’re not one of these people, before they allow you on the Internet? (I didn’t have to, but I first got on in 1981, so probably got grandfathered in.)

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