Robert J. Samuelson on The Great Inflation and Its Aftermath: How Reagan and Volcker tamed economic policy—and why Obama should be listening

Nick Gillespie | December 10, 2008

For the past quarter-century, Robert J. Samuelson has written about business, politics, and economics for The Washington Post and Newsweek.

His masterful and eminently readable new book, The Great Inflation and Its Aftermath: The Past and Future of American Affluence, may just be the most important non-fiction volume published this year-or next year, for that matter. Certainly, in a world of economic chaos and seemingly never-ending bailouts and "stimulus packages," The Great Inflation is essential reading for anyone interested in understanding what happens when the government tries to tame the business cycle and fine-tune the economy as if it were a two-stroke engine. (Are you listening, Henry Paulson? George W. Bush? Congress? Barack Obama?)

The Great Inflation tells the story of how smug economists and politicians in the post-war era almost wrecked the U.S. and how President Ronald Reagan and Federal Reserve head Paul Volcker tamed double-digit inflation in the 1980s. Samuelson provides a rich history of wisdom triumphing over hubris-and he provides a singular commentary on just where the U.S. economy might be headed for the next decade or more.

Samuelson sat down with reason.tv's Nick Gillespie in December for a wide-ranging conversation about economics, media, politics, and the desperate need for reality-based commentary. The interview was filmed by Michael C. Moynihan and edited by Dan Hayes. Approximately 50 minutes.

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Comments

alan|12.10.08 @ 4:44PM|#

Excellent, looking forward to watching this after diner. Samuelson may have had a few goof ups over his long career, and for that matter, so have Friedman, Hayek, Von Mises and Rothbard, but he is one of the few under the Keynesian classification who does not ignore elementary 'micro' economics (i. e. trade offs, opportunity costs, etc.) for the greater glory of macro scale policy, and pound for pound the best living economist of whom I am aware and also one of the few who writes well.

alan|12.10.08 @ 4:54PM|#

Of course, this would not be complete without a camparison of Samuelson to Krugman. The 'standing on the shoulders of giants' metaphor is often used to describe the relation of the current generation of economist to previous, and if that is the case, Samuelson would be honest, hardworking Geppetto and Krugman would be Pinocchio digging his heals into Geppetto's chest while dreaming up explanations of why the New Deal did not go far enough, and however much we plan to spend on the current crises we should double it.

Paul|12.10.08 @ 4:54PM|#

when the government tries to tame the business cycle and fine-tune the economy as if it were a two-stroke engine.

More choke! No wait... less choke! Wait, more choke! No wait...

|12.10.08 @ 4:58PM|#

alan,

You are thinking of Paul Samuelson, dude. Robert is an entirely different creature, occupying a seprate space-time continuum..

Paul|12.10.08 @ 4:59PM|#

Seems like every generation has a 'flashbulb' moment in their own personal history. 9/11 will certainly be the flashbulb moment for many people and it was probably mine, until this bailout crap started to happen. I guess the bailout will be a flashbulb of stupidity for our government.

9/11: A couple dozen guys with box cutters got lucky and sucker punched us.

Bailout 2008: The government set a new course for involvement in the economy, crippling us for generations to come.

|12.10.08 @ 6:19PM|#

So you guys are posting interviews with your loyal advertisers now? I can't wait for the exposee on Carpet Humping Guy.

|12.10.08 @ 6:28PM|#

9/11: A couple dozen guys with box cutters got lucky and sucker punched us.

They didn't get lucky, we acted stupid. Our policy since the beginning was "Do what the hijackers demand and no one will get hurt. Don't rush them, don't antagonize them, don't try to be a hero. Just do what they say." In the pre-suicide-terrorism days, that was a perfectly sensible response. That all changed on 9/11. Three guys coulnd't take over a single plane today armed with only box cutters, but they could have any date before 9/11/01.

|12.10.08 @ 6:30PM|#

Sorry for the off topic, I just hadn't had my daily fix of hating on troofers yet.

Paul|12.10.08 @ 6:48PM|#

They didn't get lucky, we acted stupid.

Same thing.

Like when I get laid? I get lucky, she got stupid.

I'm here all week.

|12.10.08 @ 8:25PM|#

Paul and Bradybuck

What dupes the two of you are. You guys are a couple of Mikeys-feed them a fable of 19 arabians with box cutters-they'll eat it.

Grendel|12.10.08 @ 9:47PM|#

Of course I would. Arabians are delicious!

alan|12.10.08 @ 11:12PM|#

helping hand | December 10, 2008, 4:58pm | #
alan,

You are thinking of Paul Samuelson, dude. Robert is an entirely different creature, occupying a seprate space-time continuum..

Your honor I would like to amend the previous statement . . . explains a lot, just comparing bibliographies there is some of both of their works that have crossed my desk over the years, including the textbook.

alan|12.10.08 @ 11:17PM|#

Brandybuck | December 10, 2008, 6:28pm | #

9/11: A couple dozen guys with box cutters got lucky and sucker punched us.

They didn't get lucky, we acted stupid. Our policy since the beginning was "Do what the hijackers demand and no one will get hurt. Don't rush them, don't antagonize them, don't try to be a hero. Just do what they say." In the pre-suicide-terrorism days, that was a perfectly sensible response. That all changed on 9/11. Three guys coulnd't take over a single plane today armed with only box cutters, but they could have any date before 9/11/01.

Second that, the 'professionals' use to always encourage passivity and cooperation in the event of a home invasion or mugging, you don't much here that rubbish post 9-11. Passivity only encourages criminals as it takes the risk out of their actions.

zoltan|12.11.08 @ 3:25AM|#

Three guys coulnd't take over a single plane today armed with only box cutters, but they could have any date before 9/11/01.


Hmm, I didn't realize there was a measurable increase in courage and intelligence in the average sheeple compared to 2001. Of course, your unwavering confidence to the contrary must be irrefutable proof.

|12.11.08 @ 8:16AM|#

Why'd Reagan fire Volker and replace with Greenspan?

perilisk|12.11.08 @ 8:23AM|#

"Hmm, I didn't realize there was a measurable increase in courage and intelligence in the average sheeple compared to 2001. Of course, your unwavering confidence to the contrary must be irrefutable proof."

The point is that the rules of the game changed. Before, it was "fight back and die; let them land the plane and demand money or get their message out and live". Then it became "fight back and die; don't fight back and die with everyone on the plane." Besides, after 9/11, there were several cases of people flipping out and mob-killing passengers who were just acting agitated for non-terrorist reasons, which tends to discredit your theory.

Xeones|12.11.08 @ 9:26AM|#

Besides, after 9/11, there were several cases of people flipping out and mob-killing passengers who were just acting agitated for non-terrorist reasons

See also, that time Richard Reid tried to light the explosives in his shoes. Even some of the French passengers on the plane jumped him.

DannyK|12.11.08 @ 3:04PM|#

Volcker was appointed by Jimmy Carter in 1979. Ronald Reagan just had the good sense to keep him on the job and back his play.

|12.13.08 @ 12:49PM|#

Besides, after 9/11, there were several cases of people flipping out and mob-killing passengers

I wasn't aware that mobs of airline passengers had actually killed anyone.