A Word on Words; 2309; Wyatt Wells

foreign word program delving into the world of books and their other this week why have wells talks about economist in an uncertain world goes forward onwards mr john sigg and the chairman of the freedom forum's first amendment center at vanderbilt university hello i'm done so you know once again welcome to word on words and welcome two to a first time author a historian of note why wells glad that year pleased to be here and i'm glad i did talk about the the great arthur burns nack who was indeed an economist and an uncertain world yes certainly let me yeah let me ask you about when a nice historian like used in reality old curmudgeon economists like like they're like barnes and then you're not an economist and yet you delve into this wooded hill expertise something from the subject well i was interested in the economic problems of the nineteen seventies for many years after the second world war really twenty five years was a tremendously prosperous period where people thought they knew what was going to

happen in the economy that you could count on to provide regular increases in living standards solid growth and jobs and suddenly in the nineteen seventies things changed very fast i suddenly the economy stopped providing higher living standards that we could count on jobs that people used to be sure would last indefinitely disappeared and steel mills in auto plants and the like and i was an arrest and interest rates would go up and down and fluctuate yeah he wasn't honest they go around and we were in an international really a global economy are moving toward years and into that into that turmoil moved a man who was farmer's ill and contentious arm and as you say out early and also courageous an immensely self confident yes so wrong and never in doubt that is now the birds now now let's talk about an hour from me

childhood austrian biber yes born in a jewish ghetto of love golf which is today actually in ukraine have emigrated with his family to this country in nineteen fourteen right before the first world war and grew up and buy a new jersey went to columbia university on a scholarship i guess pretty poor upbringing yes very much so now he came under the influence at columbia while a great girl while a great economists of the time and i think that if if i look at the burdens future it was that influence anti keynesian influence the typical player a result battin and throughout is yale's clear is that fair that think that's a reasonable statement wesley claire mitchell who as is his mentor was the father sort of love economic quantification

which means things like the numbers we hear a three week or two on the new service at the idea these numbers was fierce gross national product and he was a real power i mean in the world of economic research he was real part yes how does one emerge from the shadow of a powerhouse like mature and become a powerhouse why aren't part of it is barnes was just so immensely sure of himself it's difficult to exaggerate the barnes was always convinced he was an important character and much as you might admire mitchell and falling he was never one to fall into a shadow but burns also had the advantage that he went into an area that mitchell sean which was government gets he worked is the chairman of the council economic advisors for dwight eisenhower now i gather that because he had been part of mitchell's national bureau for economic research yes and an effect was mature image of lightning rod

there that's so it caught the eye of the administration when it came in and roth yes and barnes had also been one of the critics of keynesian ps an end and keynesian theory of bedford had its run in the prior years and would again jesse estes has earned sick a man and had some impact on as anonymous for guessing talk a little bit about that period when you went to work for it but i had the feeling that is dominance later when he we went into the nixon most of when an excellent question call on that search his experience a brief relatively brief time there with their with broken eisenhower made a difference later oh it certainly did when barnes went to the council economic advisors congress was seriously thinking of getting rid of it the agency he just did not work very well and burns reorganized it and made it

an organization that gave the president advice on economic matters even then he was contagious george opfer inspector the treasury and he mixed it up yes quite a bit on theory and philosophy us and he seemed to win a share those battles with i guess he did he actually got along very well with eisenhower actually had a regular weekly meeting with them we choose doesn't sound like much but when you got a president and everyone is clamoring for the president's attention the regular weekly meeting is is quite a show of respect i had the feeling from what you say about him while that in that period he was not yet certain that he was going to go all in with government the allure of government loses its own magnetic for a while but then he had tenure at columbia yes and he had to risk giving up his tenure at columbia

and being part of the faculty there if he was staying dublin for a long experience so that point he chose early universe to live and went back into the shale during that period yes kennedy came into office in the sixties and keynesian economics during the kennedy johnson usually so for us there you become finally became part of richard nixon's in a circle right really even in the sixties even before nixon would look like nixon was politically has been this he was even then part of an advisor an advisor and interesting how he how he caught on where and again what was it about the man that made nixon gravitate to think well nixon was a very intelligent man and berns was two and nixon had an unhappy experience of the eisenhower administration to a large extent because i don't

want people running just in the nixon seriously and burns did the burns recognize he was a very bright chap and became friends with an aunt was willing to listen to him in india with him as the series you know as an important person and berns was one of the few sort of people around eisenhower who was willing to give nixon lot of respect you know after after the administration nixon ran against any loses this goes into the climb than one for bonaparte fell four any loses further deeper to live within that period burns continue to keep contact with them continued to hit islands almost say do next and my boys he's gonna rise again on the other hand as you say you quote somebody as saying once he was president burns almost drove nixon bats yes there was john ehrlichman who actually wins over

burns was a very contentious may and he liked to argue nixon haiti york and berns was perfectly willing in a cabinet session or a meeting with the staff have a long often very little argument with somebody disagreed with with nixon with members of nixon staff and nixon been like this he also got tired burns always thought oh well berns had been nixon senior in the eisenhower administration as a practical matter and burns had trouble adjusting to the fact that nixon is now the man in charge he thought nixon as i can add as nixon's of himself was nixon's economic mental yes yes nixon was a protege and unfurling as they say jacqueline sesno was a protege that's right and an american audience of a shunting aside tried it and lay considered one person weighs the presidents it has infuriated president you

and that and so burns a ritual worked in nixon's when the white house staff and he was squeezed out basically the squeezed out by haldeman ehrlichman but also by other people the us by patrick moynihan the us senator from new york or within the head break on the snl is also bad about economic and social policy now there came a time of course when he they needed someone and then yes and there it was the man who would run it for nineteen years i'm amy martin william mcchesney martin wright he was he had to leave it could not be reappointed and burns was the man nixon chose to replace him are probably nixon had always planned but barnes in that job mean for the moment is elected president and realizing martin was going to be retiring at the end of nineteen sixty nine he thought burns's my person i'll put him in the federal reserve and nixon and martin had not had a happy relationship

nixon didn't trust martin they believe that he had caused the wrist there was a recession in nineteen sixty that probably call snakes in that very close election of john kennedy and nixon thought martin it was partly to blame for that so nixon was either get rid of martin and put his own man barnes in the federal reserve of course that was not always a happy relationship even though no point in it he was very heavy unfairly in favor of the wage policies of the restraints yes desperately worried about inflation is a very funny line in the end of the book in which you quote nixon on naming him to the pharaoh mr about that time he said something like you and give him a direct yes there will be no recession right as if the label on the night miller yes yes nixon wanted to prevent nixon were the economy to be good this obviously would help his political prospects he wasn't any unrest in economic policy

and that he told burns your job to keep interest rates low and the economy humming but ten years earlier that might have turned out well as it turns out by the early nineteen seventies problems of beginning to emerge stagflation we have a recession and inflation is which doesn't fit the traditional molds and doug burns is saying what we need is wage price controls and we can't cut interest rates too much we can't put too much money into the economy and it's not happy about either requests know and really since his hatchet man golson yes they're not that you explain the stomach when i'm not sure after reading it whether nixon put colson on burns are well colson on his own when they're submerged i'm not sure frankly which she did colson in the summer of nineteen seventy one issued a statement burns had been calling saying wages are going up too fast wages are going up about ten percent a year and you're saying we can do this and keep inflation under control gonna be a way to price

spiraling colson leaked the story to the newspapers that brunson i asked for a fifty percent pay increase the photo was alive which was why it was not for him and it's not clear what nixon had exactly how much nixon had and that nixon we know nixon was furious with words we have notes from meetings were on a late in louisville course in the dewey was at the nsa to gossip the chairman's and some discomfort yes and what may happen as nixon may have sort of said well we ought to do this and not a minute seriously and golson and mail fraud often done this and finally nixon does come to wait five voted on it doesn't it what was supposed to be a nine day free yes which last almost two years almost three years ago the end of the administration well first law before the administration in his policies burns policy beginning to disintegrate and yes i mean his way his effort to bring the ten major nations theo's home also called smithsonian accord that was sort of falling apart with

price controls were creating major political problems yes vote still won it comes along and because well it's a true that cause watergate was such a probably reappoint mr would he reappoint anyway he probably would've reappoint him anyway but watergate man dick nixon just had other problems to deal with and then worry about the federal reserve and in fact in the watergate period nixon in barns get along together quite well there no course nixon a potato in the last six months has just paralyzed by a watergate there's a point really doesn't even meet with bart's for once he burns in or where those policies have so called disintegration of confidence in him begins to revamp and re strategize and when ford comes in got a bit of a solution to prove williams and they do an ad for luggage is fourteen and barnes got along famously it's it's sad really incredible

presence almost always quarrel with the federal reserve chairman example it's rare that doesn't happen in burns and forth almost never quarreled burns was always over at the white house he probably meant more with ford a lot of cabinet officers you called for is saying not only as a great promise he's also great educators and my interpretation that is that ford was one of the people being educated i'm on tour buses and on and on and on inflation are causes are any inflation and parsley but that relationship was quite was quite good it was an end the policies seem to work quite well mean going into that election the economy was with rebounding a little bit of a john ford running for election our newest in nineteen seventy six and that and that looks it looks like a pretty good time for him and was a very very close ally guess you couldn't say i don't think that economic policy was what hurt for the most recent that now at

that point now the problem is basically what's left over richard nixon years and that ford did as well as he did as a surprise as our universe but in a new an ardent bird know now carl comes in and then rumors suspicions yes jack carter was of course a democrat burns was a republican carter had roar of run for election saying interest rates are too high we have a recession we ought to put more money into the economy inflation is not a serious problem right now it's you know it was with the arab oil embargo in nineteen seventy three but a nineteen seventy six price increases a much less we should worry about it so much and burns of course by this point is casanova says was shifted you with inflation first idea to bring inflation under control you won't accomplish anything unless you do that first and they were on a collision course carter wanted to stimulate the economy to put

money and increase spending burns wanted to keep waging a war against inflation so the site almost every five the head with an illustration had to do with his fear of inflation is creeping inflation coming down thing and us and runaway inflation well you know i i think back on him and i remember i'm old enough to remember william mcchesney martin doing nehring made these years on the debate over what condition rename him and they did i can't remember a chair with it for a sense of altered in the current iteration of anomaly i yes plowing interest rate was controversial but i can't remember anybody a drawing the fire that arthur burns through during those difficult eight years yes years he made difficult by is that fair that they were even difficult regardless and in the second half let me put it this way in the first half of his eighty

years his policies may well make things worse a difficult situation becomes worse in the second half his policies probably make things better than they might have been otherwise but they're extraordinarily controversial unit is a terrible recession in nineteen seventy four seventy five and several million people it all it ends barnes doesn't turn iran immediately begin to pump money into the economy during this and that of course is very controversial you know carter and he have an uneasy truce there times when they agree among them the right number and getting into a fight with congressman royce and carter tilting toward or burned he goes into the end of his appoint term thinking the car has been renamed after all martin designed by kennedy a republican leaning by democrats looking for stability of the fan caught a surprising yes he does not reappointed tells

him a few days after christmas that he's not going to get another term at the fed and a man named william miller who is the head of the textron corporation will be taking the position miller may have been a mistake on a car or seen come through africa relatively few in there is there's a feeling that no or maybe the worst federal reserve chairman's gavel well i got that sense we moved across in so quickly in your book because as time was so brazenly there eighteen months as the happy pear and then bowker content vs brands could have stayed on for a six year term not as chairman chose not to do right basically had burned state he would have been the federal reserve board the chairman doesn't give orders it's a group of people to vote seven of them end the chairmen can lose votes and it burns had stayed in the federal reserve of being a former chairman being a very forceful character he might well i'm in the person making policy and he thought it's not fair to miller for me to stick around and so their challenges authority make it impossible for him to assert himself

so i'll resign and make way deceive no work and run things and give him a chance trying the wrong way in before you two years after years after years as a and i don't know what are the birds are expected reagan did what i think was the unexpected got in our washington sent him to bar yes and into west germany as ambassador yes which is probably not a bad move and he had such a relationship with helmut cole got was not forgotten the pope of economic it was hellish met helmut schmidt called unbroken pope of economics but he had a good relationship with cole to bob burns despite the scrum utterly image which is very real we're taught me as an economist as a person to be immensely charming had a tremendous number of friends and even out along with some fierce political or intellectual critics go along with very well personally you know members of congress yes i mean your city were

compatible right happen within the war did battle lot of the controversy was not just his fights with administration so that named him in and those of the other party but part of the controversy had to do with those fights and conflicts like that literally yes proxmire proxmire m o n and fights over sunshiny you know sunshine and said no barns the grates are in conflict with what congress was congress of course would more control over monetary policy went on to him at one point yes the federal reserve runs itself it doesn't really answered anybody in the short run in the long run presidents appoint people things like that but from day to day it runs policy as it sees fit and congress wasn't sure that you know this is a democratic country why should this border on such an important part of policy moreover a lot indeed agree with the policy and byrne says no strong strong any inflation a policy against inflation before anything else a lot of people in congress including senators proxmire

representative royce i did not agree with this and so there was a struggle was a saga played out and how much independent should the federal reserve have you know and in your conclusion about arthur burns you finally on ask two basic question is what went wrong and follow along with his parents yes on those bad judgment when you get an end and end and those who prefer found sullivan profile yes some of them were pretty serious a particularly when nixon imposes wage price controls in nineteen seventy one burns is convinced that interest rates have got to stay stable says if interest rates start going up while everything else is frozen prices are controlled political support for controls is going to collapse and the control program will fail so we have to keep interest rates stable what that meant was in nineteen seventy two which was a

very prosperous year the federal reserve just pump money into the economy and as a result of a severe inflation the second question us quiet with things not worse yes and there you come down very positive way and say his commitment to a policy has dedication to it his courage and his self confidence helpless through because it helped this country realize that fighting inflation was important and that at times maybe interest rate restraints were something that yes we're that we have the apple ii well yes but historically crisis like you have in the nineteen seventies i mean this of this or thing that can lead to depressions i you know years with fifteen percent unemployment which which if you look historically we have prices of the scale sometimes a as actors get that bad and the seventies were not a good decade economically but it was not a repression decade it was in the nineteen thirties or even the eighty nine years which was another terrible decade economic how do you come down to wire

finely mixed bag is there yes was his tenure more positive than i mean i think so despite all the convention despite the contention barnes whoever was going to be in charge there would be serious problems in retrospect the american economy changed in the seventies it had to change in the inflation the recession the international problems our reflection of these needs for change and so you have to take into effect take into account that there's almost certainly going to be some serious problems whoever's in charge no matter how brilliant and that burns was willing to try something different he decided a lot before other people that the whole keynesian techniques of you know increasing spending or cutting interest rates are going to work in this situation that we need to do efforts a lot of effort to keep the international financial situation stable these are things

that needed to be done and because of the mindset people came in the nineteen seventies with the basic strength of the american economy the sort of keynesian idea switch which they were armed with which you were very well for many decades twenty five years ago most people probably wouldn't have reacted as quickly as he did to the changes so as bad as things were the modern warrior my get a good deal works then if we have a weak kneed sister in there or brother who succumbed to the popular trends all the will a policy of the administration that congress it could've been as it could've been and so his courage and confidence in the final analysis made things better than their mother they might've been if you look at france and britain at different points in the seventies decide they want to spend their way out of the stroller going to print up lots of money and basically their economies calm incredibly close to collapse this program apart is about how writers write you enjoy doing this work the

longtime for yes yes i was at work from about six years i guess i get obviously there's some point you don't enjoy but i enjoyed it it's sad it's fascinating particularly to go into the documents to try to reconstruct what happened from the documents that have been laughter well david let's walk around even organize and raise people's offices but to reconstruct what was happening what was going across people's desk and it's very interesting i know you're a jacksonian style you worked on with it as the interest of the state in another book in you saying oh no i would be more just press is driven contemporary history probably might the president is about the second world war about international cartels which were very important although i don't remember a typically before the second world war and govern certain industries chemical companies why have wells author of economist in an

uncertain world as ben our guest on a word on where your host is then john seek employment chairman of the freedom forum's first amendment center at vanderbilt university this program was produced in the studios of wbez in nashville