>> well, first, i just want to thank the ambassador for being here. there's no one i know who has done more to preserve the legacy of franklin roosevelt than the ambassador. so i thank you. [applause] >> and my short answer to your question is yes. i think the court should be criticized. and i think its decisions should be questioned. while they're unaccountable in a electoral sense. this is a way courts are held accountable by a constant public discussion by what the court is doing and a constant public decision of the stakes. at one point over the course of this fight, felix frankfurter advises franklin roosevelt to take the country to school.
he wanted to educate the public about the court, about its power and the effects of its decisions. that's something that roosevelt very much took to heart. and i think it's something that really every president should take to heart. and i want to be clear, i wasn't implying that president obama shouldn't engage in a similar discussion. it's important that the staff members it's the kind of out and owl political brawl they have with john boehner or mitch mcconnell. this is a different thing and they need to proceed with caution and they should call attention to what the court is doing absolutely. >> i courage everyone to buy "supreme power" and i thank you. [applause] >> for more information visit westwingwriter.org.
>> a history professor profiles the economic thinkers who champion the theory of supply-side economics and whose ideas were put into practice during the 1980s. this is a half hour event. >> now that the main course has been served, it's time to introduce you to someone who exemplifies the kind of scholar and the kind of scholarship that isi is working to produce. dr. brian, author of the 2009 templeton culture of enterprise
book series title called the "econo-clast" and it really made quite a splash and you'll hear about that in a moment. but i want you to know that brian had a long association with isi's educational program. as a freshman at columbia university, in 1986 he first joined isi and over a nearly of a quarter of a century brian would go on to continue his work with us. editing a student newspaper funded by the collegiate network, also supported by the templeton foundation. and to receive the richardon fellowship for graduate studies. he's a professor at sam houston state university in texas. he serves as a mentor for isi's
undergraduate honors program. he lectures on campus and at major events at our recent leadership conference in indianapolis. and participates of the studies center. his book "econoclast" he has had a wonderful reception. he has become something of a press celebrity. these matters are adequately described in the program that you have tonight. but let me just conclude by telling you what larry cudlow said about it. when brian was on his show says, the book that americans need to read now as our leaders rush forward to deal with the present crisis without consulting the lessons of the past is "
econocl econocl econocl econocl econoclast." >> before i continue, yeah. >> speak up. >> speak up. you might want to visit the bar before i continue because a lot of what i have to say here is kind of going to be kind of grueling. maybe you'll want to pop a pill or have a loved one present and to hold on to something might be helpful because i'm going to mainly talk about the middle third of my book, "econoclast." the first third is kind of a history of the -- of the behavior of the american economy
from 1913 to 1969. the second third, however, is about the stagflation era, 1969 to 1982. and it really stunk and the last third is the great victory of supply-side economics under reagan and after. but i'm actually going to mainly talk about that middle third. and as i say, you're not going to like it. it has been a big couple of weeks for the historic. we've all heard or seen that word "historic" just about everywhere, in the newspapers, the internet news feeds and public radio. the passage of the health bill has, of course, been the pretext. i saw that the associated press as well as "usa today," "the wall street journal," and the houston chronicle, back where i live, all used that adjective in
bold headlines, historic health bill passes. type in the term "historic" to the "new york times" search engine and five of the top ten results that come up pertain to the health bill. "historic," the word is ote of the adjectives derived from the name of my profession, history. and let me tell you something about that word, "historic." historians almost never use it. they use the adjective historical, a-l, at the end all the time. historical simply means having to do with the past. so it comes in handy when writing about history. historic, however, refers to the amazing quality of something that happens in the past. and if that thing in the past, that historical thing isn't amazing, it's not historic even
though it's historical. the reason historians generally keep away from historic is that it puts them out on a limb. this thing when in history was amazing. historians are concerned they might be proved wrong if they speak in this way. now that thing in the past you've identified was unusual, not amazing. it might be objective. it was superficially interesting but on closer exam run-of-the-mill. apparently unique but in reality common. if you key word search the run in flagship journal the academic history which comes out quarterly, you'll see that outside references to architecture, the term historic is used about once or twice a decade. yet care of the papers and the airwaves would have been treated to it abundantly since late
march. so when commentators jump on the chance to call something historic, historians smile. okay, we laugh a little. i go into this because we pay a price when we leap to call things historic when we should just call them historical. we pay the price of misunderstanding. moreover, we pay the price of basing our actions in navigating the challenges we face today on that misunderstanding. this intellectual mistake, i believe, is one we have roundly made in this country since this confounded recession started in the latter portion of 2008. for some reason, and almost immediately, we started saying that this economic crisis today was historic. it was maximumal.
we heard this 100 times. i challenge people who have not heard this one million times. it was the worst recession since the great depression. a cliche that today is as common a dirt. -- as dirt. we jumped at the chance to call this economic rough patch we were experiencing historic, nothing like it had happened since the greatest economic calamity of modern times eight decades ago. well, let me ask, has our recession, our economic crisis, really been historic? has the stock market, for example, ever lost half of its value in a quick crash as in 2008/2009? and then regained about 60% of its loss in a snap-back at any time in the year since the great depression 'cause that's what happened in our crisis? well, certainly exactly this happened in 1974, '75 so there's nothing historic there.
how about say unemployment rates peaking at 10.7% as of late '09? well, it was 11% in 1982. again, nothing historic there. how about five quarters of gdp decline as in 2008/2009? well, that happened from 1973 to 1975. indeed, the drop in gdp from 1957 to 1958 was steeper if not shorter than the worst we've recently had. okay. well, how about a mass failure of the banking system, the well, the failed system in 1989. well, by the way during our own crisis of the last two years, we have not seen it impossible to borrow money because the prime rate of interest had blown past 20% as in 1980. we have not seen three straight years of double-digit inflation as in 1979 to 1981. we have not seen oil increase
14-fold in price as it did from 1973 to 1980. we have not seen the stock market lose 75% in real value over the long term as was the case from 1966 to 1982. we have not seen it take three times as many dollars to maintain your purchasing power over a decade as was the case in the 1970s. and into the bargain there was a home foreclosure crisis in the 1970s particularly in california. i recount these facts to relate beyond a shadow of a doubt that our crisis today has not really proven historic. for it is the worst economic crisis of the last four, not the last eight decades. and because we have allowed ourselves the mistake of forgetting the economic calamities of the 1970s we have compounded this mistake by thereby not learning from the 1970s.
specifically, how we escape them in favor of a fine, long run of prosperity that went on for a quarter century. from 1982 to 2007. indeed, a run of prosperity so steady and so enduring that i for one am ready to deem it historic. now, there's a very good reason that commentators have been quick to call the economic predicament of our day historic. the reason is that it is next to impossible to read books by professional historians detailing economic crises since the great depression. most of all, it is next impossible to find books written on the perspective on what resolved those crises. when i began researching my book on the history of supply-side economics, "econoclast," five
years ago, i immediately ascertained on doing the literature searchs. but not one book scarcely even one article had ever been written by a holder of a history ph.d. and an academic position on the supply side revolution in economic policy. on the reagan revolution. and while i must compliment my colleagues in history for being big on the word historic but i must say no real interest in telling the story of how our nation was once laid so terribly low by the economic malaise of the 1970s only to embark on the longest period of smooth noninflationary growth in its modern history. it is true that economists have striven to depict this history but the specialty of economists is statistics and models. weaving the insights of the economics of the narrative of
the past is the job of historians. i can only assume that when the recession hit in 2008, if we had had then a nice shelf of narrative history based on real primary sources of the economic funk of the 1970s, and the policies that put it to pasture in the 1980s, we would have avoided two large mistakes. we would not have called ours the worst recession since the 1930s. and we would not have presumed that the only solution to economic crisis history had ever shown was that outlined by keynes and manifested by the new deal. for one thing really hits you, let me tell you, when you start writing a history of the economic predicament of four decades ago. this is that except for the
1930s themselves, there was no mess stretching like it in the centuries. the 1970s were the second worst period in all of american economic history. from 1969 to 1982, the american economy endured three double-dip recessions. which is to say there were six recessions in a span of 13 years. now, remember people tried to ride out the rough patches that recessions bring by relying on savings. could you please imagine doing this, saving money in the context of the 1970s, and i told you i warned you early, it's going to get heavy-going. [laughter] >> hold on to something. [laughter] >> inflation -- inflation, which ran at 9% per year in this 13-year period made it impossible to save money. consider the options.
no bank can credibly offer double-digit interest on do -- deposits. bonds, how about bonds? there rates fixed for the long term is fixed by the consumer increase of the price model. aaa's went down 55% in a decade. as for stocks they were supposed to go up 10% every year isn't what the stock market is supposed to do. return 10% every year. well, let's say they do that. that gain would barely clear the nearly 9% inflation in the 1970s and yet it would be a 10% tax increase in 1969. so in the 1970s stocks had to make 20% per anum in order to return any gain to the investor.
of course, nobody affected this kind of performance from equities. stock participation plummeted and it ground down relentlessly every year. james lory said in the 1970s stocks lost more than any decade since the founding of the dow with the 1930s included. he called it the second great crash. okay. well, you could put your money in land, commodities, art, collectibles, whatever, durables. since anything was in supply by ge -- geoli. land has a excise tax that zooms up with the value of the property. in california, in the 70s, where prices went up, so did texas.
-- taxes. taxes went up five-fold on property. if you wanted to sell to realize your appreciation or to pay those taxes, the 50% capital gains tax got you. you were stuck. the run-up in land only cost you. as for the rest, well, i guess you could try to play gold, oil, copper, sugar, renaissance masters, but you better know what you're doing because these things are always tricky investments. saving money became a fine art in the 1970s. something foreclosed to the masses. so masses spent on rv vehicles and that coif stuff. they had to spend meant watching your money evaporate against inflation. as for the future, that would be adjusted by cost of living adjustments, colas which was raises to keep up with inflation that was demanded from employees.
hence, the resurgence of large negotiating blocks on the part of wage earners, of unions in the 1970s. i hope you can imagine what all of this held in store for business owners and for entrepreneurs. what business could credibly issue a bond, promising to clear 9% inflation every year for 10 or 20-year term? as well as clear whatever large portion of the coupon was to be done in taxation? the bond would have to pay 15 to 20% per year for the long term. only firms with the most distinguished pedigrees, the soundest reputations and the clearest prospects could credibly issue long-term debt at these levels. so start-ups dried up as the fortune 500 became the only enterprises anyone wanted to lend money to. venture capital was waiting things out in commodities. as for the economy, the problem
here was that young companies ordinarily create jobs at 20 times the rates of the fortune 500. silicon valley executive ed vow testified to this fact before congress in 1978 and everyone was aghast. small business creates jobs and the business market made it possible for the small business. and it went up by half with the recession of 1969 to 6%. unemployment failed to moderate in the brief recovery after 1970 and then leapt by 50% again to 9% in 1975. over the next several years joblessness was only able to take a breather at 7% before rocketing to the double-digit levels of the early 1980s. as for growth, gdp, the king macroeconomic statistic, it went
into a degenerating tailspin for the long term. post-war prosperity was the name given to the economic scene of the quarter century after world war ii. well, post-war prosperity had returned gdp increases of 4.3% per year. this trend was cut down by 45% to 1.8% per year through 1982. it was a bewildering despiriting bakers dozen years for this nation. and the only thing people could capably do in the face of it was name it. it was the stagflation era. stagflation. from stagnation plus inflation. the economy was going nowhere, yet, the price of everything was getting out of reach. according to keynesian theory, this was a statistical
impossibility, a freak, a contradiction in terms. yet it was an all too live reality in the lone 1970s. at the time, back then, the standard response to stagflation was to brand it incorrigible to say there was no defeating it. that it was a new fact of life. the point had arrived where the boundless ambition of the united states finally had to be cut down. we had to adjust to diminished expectations. on account of scarce resources that limited growth. as well as a congenital excessive consumerism on the part of the american public that bid up prices in the context of scarcity. that was the general view. i'd just like to have a few words about what the three presidents who thought about stagflation at the time. this would be nixon, ford and carter. i talk about this in the book. nixon -- nixon actually wanted
high inflation. he told his fed chairman, arthur burns, whom he had known very well when they were both in the eisenhower white house -- he told him i want to go off the gold standard and you're going to print money like crazy and it will cause inflation. and there's a tradeoff of inflation and unemployment. i want to print money like crazy and cause inflation and that will solve my unemployment problem but i will counteract that with price controls. so we're going to have jobs because we're causing inflationary pressure but we're not going to have inflation because it's outlawed. we'll have the best of all worlds. we'll have a stable price level with employment caused by inflationary pressures. it's ridiculous. everybody alluded the price controls and ford changed this policy and he said, okay, okay. inflation is bad no matter what. i'm going to ask the american people to stop buying things. and he said 'cause if you stop
buying things there's in insixteen to raise the prices. -- incentive to raise the prices. that failed. and then carter came in and said, okay, now it's time to get serious. i figured out why inflation is happening in the 1970s. it's a psychological disorder on the part of everybody on the part of the country. [laughter] >> and we have to go on the couch and analyze what's wrong with ourselves. why do we buy so much stuff, way more that we can produce. and once we endure that psychoanalysis and we'll solve it. as for the top professional economists, how about them? well, here's james tobin of yale. yes, i'm going to disthe yalie right here at the harvard club. he said the falling in 1980 the year before he would win the nobel prize. higher inflation, higher
unemployment and it frustrated policymakers, forecasters and theorists throughout the decade. the disarray in diagnosing of it of stabilization a fool hard venture. the only thing i can do at the peak of the profession the only thing i can do is give my own observations and confess my own puzzlement. professional economics simply was saying we can only cry for help by the tenth year of stagflation. to my mind, the clear record of history is that the stagflation era simply represented one of the most momentous public policy challenges that this nation has ever faced. and do you know what? a small band of individuals started to gather just as stagflation rose to its feet and
these individuals diagnosed the problem. this happy band offered a comprehensive solution to the problem of stagflation. often dismissed at the time as unrealistic dreamers, this group persisted and stepped into the arena of power with ronald reagan's election in 1980. these people, the supply cid cider -- sideers and on the implementation of this policy mixed fully by 1983, the united states was off on a quarter century run of noninflationary growth at the old fabled rates of post-war prosperity of 3% -- 3.3% per year. it simply was one of the greatest challenges this nation ever faced in public policy and it was vanquished. but that's what the third part of the book was. i want to linger here and i want to talk about that right now.
i want to say one thing about the 1970s. i'm done talking about it now so you can -- it's going to be a happy ending, okay? [laughter] >> i went easy on them. i mean, i did not tell you about bracket creep in the tax code and how there were automatic increases in the tax rate every year because the rate code was underindexed for inflation. i did not tell you about that. and the magnitudes of african-american unemployment in the 1970s because blacks were shut out of the unions and to get a real cost of living increase was to be a member of union or the budget deficits of the 1980s. the great society and the vietnam war wound down by 1975. there had never been a budget in the great years of the great society in the vietnam war that exceeded 20% of the gdp. that started to happen in 1976. after the era of the vietnam war, of the great society. a tremendous displacement of the real economy. 5% of gdp. and i did not tell you about how
stagflation, inflation in particular aggrandize the soviet union because everybody wanted to hold commodities and the soviet union had commodities and they had western currency and they needed to finance their own economy and their adventures around the world. i didn't tell you anything about that. i had them right where i had you and i put of off the hook. you read about the economic history of the 1970s, you run and embrace the economic conditions of 2008 to 2010. what i would like to do here for a few minutes is just to tell you a few facts. and narrate a few -- a little bit of the history of the great supply siders who talked about this. at columbia where i failed to take his class in the 1980s it's the stupidest thing i'd ever done. i tried to make up for it by writing the book. robert, as early as 1961,
probably as early as 1968, he won the nobel prize in economics in 1999. he said the main reason you have economic crisis in the 20th century is you're misusing the institutions of 1913. in 1913 two great institutions were inventive, the federal reserve was created and the income tax was created. and both of these things are overused. and he said the misuse of these institutions is the reason any economic crisis starts in the modern period. the way you solve economic crisis is you restrain the institutions of 1913. you stabilize the value of the currency and you cut traffic tabs. -- taxes. you cut them later because the easy way to kill something is to restrain it first. a lot of times the austrians for example are very critical of supply side well, you didn't kill the fed, you didn't kill the income tax. well, once you have stable prices, maybe the fed can vanish from the scene. if you have low traffic tabs maybe it will be painless to
have any taxes at all. so i think he deserves credit for just saying that you have to retain the state. stabilize currency and cut taxes. he said this in 1961 and he won over the kennedy administration. this is a little known fact about supply-side economics. kennedy blew off the advice of james tobin and walter heller and all the ivy league economists who said you should loosen money and raise taxes in response to the eisenhower sluggishness. and this 29-year-old kid do the opposite of that. and kennedy took that advice. in the summer of 1962. and the 1960s resulted in which there was 4.5% growth per an -- annum. this was the center of the political economy at the university of chicago where he was awarded tenure at the age of 32 in 1965. and again he won over the profession. this argument that supply-side economics is outside the
mainstream is in de-5 scombrans. -- defines. -- defiance. and we don't agree with him and we don't think you should cut money and raise taxes but, man, is he persuasive. he found a few people who listened to him including lafford from chicago. and one of his editors at the journal of political economy, paul craig roberts became a staffer for none other than jack kemp in 1975 and 1976 and these ideas of stabilizing the currency and money -- but still they had to gain control of the executive mansion and, of course, ronald reagan won and installed a bunch of supply siders in the cabinet and once
they were able to get the fed just targeting the price of gold, keep the dollar stable and there were very significant tax cuts on the margin we saw the return to prosperity. from 1982 to 2007, growth was exactly on the same trendline. of the post-war prosperity and the inflation collapsed, the unemployment rate collapsed and interest rates collapsed. i don't think i'm being maudlin in saying it's one of the greatest examples of public policy success in the modern history of government. the story of economic life in america over two centuries is of constant growth in entrepreneurial opportunity. when this wonderful stuff flags especially in the long term americanstype back. they do not want to adjust to diminished expectations, the standard 1970s catchphrase or to concentrate on a so-called better things in life. that's what they were told to the in the '70s. americans want their prosperity.
and they will work on improving america from a cultural and a moral point of view in the context of prosperity. in the 1970s, the worst decade in american economic history outside of the great depression, supply-side economics made it a surpassing good case that it could revert the economy to its win some -- winsom year. the word of supply-side economics was its bond. in the context of the present crisis, it is high time to recognize that by far, the greatest achievement in the annuals of macroeconomics came from supply-side economics. thank you. [appuse] >> for more information on booktv programming, visit booktv.org.
>> robin stone, who is darrell boyd? >> darrell boyd was many people. he's a complicated man. having grown up in st. louis in poverty raised by his grandmother after his mother died and his father left for a better part in new york city. came up in poverty and worked his way up. decided he wanted to be a newspaper man early on in his teenage years. in the 11th grade. and he pursued that through a
scholarship at the university of missouri working at the post dispatch in st. louis, his hometown. very early on he thought i want to be a journalist. and i want to be good enough to work at the "new york times." and i think that tenacity that enabled him to overcome all the barriers that he faced. so he was -- he was a mix of those people as well as a young man who was mentored by the jewish shop owners in his neighborhood. so he had some influence from the coopers as well as a rabble-rouser on campus at the university of missouri. he flexed new bound black power in the 1970s. he walked around with a big afro talking about power to the people. all of that was gerald boyd. and having covered reagan in the white house and bush in the
white house. >> as a reporter. >> as a reporter. >> for the "new york times." >> for the "new york times" and as a reporter for the st. louis post dispatch as well. so he was all of these -- all of these many facets made up gerald boyd. >> and your husband. >> and my husband. >> how long were you married? >> there was a love story that took part in black and white. it's about journalism. it's about the "new york times." there's some juicy stuff about the "times" but ultimately i called this book a success story. he was a young man who was on a mission and he ultimately achieved that mission. but he was also in search of not just professional excellence but a family, the family he had lost as a child. and he wanted that so much. so there's this personal growth story as well as this professional growth story. and i was fortunate to be a part
of both because at one point he was my boss as well. he recruited me and hired me at the "new york times" so i worked for him for a while. >> when did gerald boy die and what was his final position at the "new york times" and why did he leave? >> he died in 2006, november, thanksgiving day, actually. a very rainy day. >> unexpected. >> no, he had cancer. lun cancer. -- lung cancer. >> was he a smoker. >> avenues smoker. -- he was a smoker. he died three years after leaving the "new york times" in the wake of jayson blair plagiarism scandal. and when i go to universities and i talk about gerald's story, i ask how many people have heard of jayson blair and i see a lot of hands. and then i ask before you heard of me coming here, how many
people had heard of gerald boyd, very few hands and that's one of the reasons why i'm telling the story. it's a fascinating tale of journalism. he was asked six days before 9/11 to leave the paper. so six days into the job we're all hit with this tragedy, international terrorism. and so they're thrown into covering the 9/11 terrorist attack, wars in afghanistan, wars in iraq and they're pushing to establish their mandate on the paper and put their people in place. and the staff was tired and pushed and pulled.
i call it the kindling the and the situation and the environment there and along comes jayson blair, this young reporter who plagiarized, stole from other people's stories and made stuff up out of whole cloth. and he was discovered. and i call that the match. that lit the fire. it ignited all the unrest and uneasiness and unhappiness. and so ultimately in the wake of the scandal, gerald was asked to leave the "times." >> the fact that jayson blair was african-american, was that important? >> absolutely. it was important in how the story played out. i don't think it was important in the fact that he was a plagiarist. jayson blair was troubled. and he acknowledged that he had mental, emotional difficulties. and that all played out at the "new york times." but the fact that he was black led some people to assume that
gerald, an african-american man, who promoted diversity in the newsroom was in some way aiding and abetting this journalistic criminal when that was not the case. and, in fact, you know, jason did not like gerald as he wrote in his own book because he could not get the support that he needed from gerald so gerald didn't higher jayson. he didn't supervise him directly and he certainly did not mentor him but the assume was that there was a connection between the two. and i think that affected gerald's tenure, the end of his tenure quite significant. >> your husband died in 2006. >> yes. >> four years later you're publishing a book with his name on it and an introduction by you. >> well, i did the afterword. "my times in black and white" is gerald's book. after he left the time, he wrote
a draft -- he wrote two drafts actually. the first one was 800 and some odd pages and i remember telling him nobody cares about the kid from the old neighborhood and take that stuff out. and he wrote a shorter version 250 pages and i felt it was too truncated. it started him entering the newsroom. i said wait, what about the rest of the story before that? after he died and i finally gathered myself together, i knew that this was a story that needed to be told. i put on my reporters hat and interviewed some folks, sydney cooper, the jewish store owner from back in the neighborhood. i interviewed his aunt, aunt laura and aunt rose who's no longer with us to fill in the gap. i interviewed his first wife give some color for their wedding and fill in some of the blanks and to describe anna the
woman who gerald left his first wife sheila for. and sheila put on her journalist hat and graciously answered my questions. i did a little work. but it was for the most part gerald's book. these are his words and his story. >> it sounds a little tricky some of the interviews you had to do. >> they were a challenge. but all in the name of good journalism. >> tell us about yourself, robin stone. >> well, i'm a journalist. for about 20 some odd years in the business. and gerald used to say i couldn't keep a job. i worked at several newspapers including the "new york times," the "boston globe," the "detroit free press," magazines including "essence" magazine and health magazine, developed "essence" website, essence.com. i've done a number of things. i'm an author myself "no sequence, no lies: how black families can heal from sexual abuse" which came out in 2004.
and now i'm an editor of my late husband's book. and i'm looking forward to doing more good journalism in the future. >> what should people know or remember about gerald boyd? >> i think they should come away from his story with a true sense of the depth of his character and of his humanities. that he came from next to nothing growing up so poor they couldn't afford lunch. they had breakfast and dinner. and despite incredible odds to do what i call social justice through journalism. illuminating situations that people live in, illuminating what's happening on a national level. and also that he cared about ethics, about diversifying the newsroom and he preached something called diversity of thought, not just