Monday, December 30, 2019

DeLong: Hyman Minsky (1988): Review of "Secrets of the Temple: How the Federal Reserve Runs the Country" by William Greider. Ne... [feedly]

I concur with DeLong on Greider, and some other Left-liberal popular econ writers, whose spin style (or shallow knowledge) undermines the intended message.

Hyman Minsky (1988): Review of "Secrets of the Temple: How the Federal Reserve Runs the Country" by William Greider. Ne...

Hyman Minsky (1988): Review of "Secrets of the Temple: How the Federal Reserve Runs the Country" by William Greider. New York: Simon and Schuster, 1987, 799 pp. , $24.95 'Secrets of the Temple is a long and tedious book with a core that could have been interesting and important. The subtitle of William Greider's book... announces... its chief conceit: the Federal Reserve runs the country. As the only unqualified true proposition in economics is that there are no unqualified true assertions, the conceit is false.... Embellished with sleep-inducing asides on psychology, history, anthropology, and politics. The tone is iconoclastic; implicit conspiracies are suggested, but the evidence is anecdotal. The aim might be to demythicize money and the Federal Reserve, but ultimately Greider' s weak command over the relevant economic theory blunts his message. This reader feels that Greider set out to prove a conspiracy but he couldn't marshall the evidence. The main policy recommendation-to bring the Federal Reserve under the control of the administration-is weak, especially in light of Greider' s strong views. Given the economic weirdos that recent administrations have favored, I am reluctant to endorse such a concentration of power.... During the 12 years of Nixon, Ford, and Carter, the Federal Reserve and the central banks of the advanced capitalist countries seemed impotent validators of price levels resulting from the exercise of market power by unions, firms, and cartels of raw material suppliers. No strong claims that the Federal Reserve runs the country were put forth. Proposals for incomes policies were rife.... The Reagan Administration had an incomes policy... high unemployment... welcom[ing] imports, it kept the minimum wage constant, and it bashed unions. Breaking the air controllers strike was the key anti-inflationary act of the Reagan Administration. The second most important such act may have been the acceptance of the flood of imports.... Ultimately, Greider cannot sustain his conceit because his command of economics is incomplete.... Especially when the financial structure is fragile, the Federal Reserve is mainly a crisis-containing mechanism, rather than the agency of a conspiracy to bias income distribution.... In spite of the evident shortcomings in his understanding of economics, Greider had the makings of a good, forceful, 200-page book that could have... opened a public discussion of the proper use of the Federal Reserve. His text runs to 717 pages. In this case, more is clearly less...  

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