This celebrated author feels his greatest achievement was not his books but his time as head of the body responsible for US price controls during the Second World War. He contrasts the success of this with the inflation that took place after the First World War, when the Fed was in charge. 'Historians never mention inflation as they did after World War One. But if - and I think this is the basic rule of all public service - if you succeed your work is forgotten.'As DP points out, the facts show the exact opposite. Galbraith is so wildly ignorant of the facts that he brags about a failure being his greatest achievement. Thomas Sowell pointed out Galbraith's ignorance nearly three decades ago in this 1975 review of Money: Whence It Came, Where It Went:
Price-fixing during World War II was in the opposite direction trying to keep prices down while the money supply rose. These controls were "highly effective" according to Galbraith. His evidence? The official price index did not rise much during World War II. That is. the prices officially reported to the government did not rise much during a time when it was a federal crime to raise prices. The black markets and quality deteriorations of the period are mere "legend," according to Galbraith, though those of us who lived through it may remember it quite differently. Galbraith also glides smoothly over the horrendous shortages resulting from price-fixing which often reduced the "Official" price to a hypothetical number showing what you would pay if you could actually get butter, steak, or housing. Of course, if you were serious about getting those things, you paid a lot more—and neither you nor the seller reported those prices to the government.Is it just me or does anyone else get the creeps reading about someone so out of touch with reality?
Cotton is just one of many markets where U.S. and European governments intervene to give domestic producers an unfair advantage. In addition to agricultural subsidies, which amount to more than $12 billion a year in the United States, producers in poor countries face tariffs and quotas that make it difficult, if not impossible, for them to compete.
While a war with Iraq won't much affect overall growth and investment, at least directly, it will breed more uncertainty about the future, which usually drives businesses and consumers to delay some large investments and purchases. This would mean slightly slower growth in the short run that could offset the modest stimulus from the higher military spending. Once we win—and assuming the victory comes fairly easily—a brief surge of investment and purchasing could follow. But much of this effect could be offset, too, by tighter credit conditions from higher budget deficits. Like most wars, this one could also affect exchange rates, and here we're likely to benefit. The United States is the No. 1 safe haven for foreign capital. Trouble anywhere draws funds to our markets, strengthening the dollar and pushing down our interest rates.Of course, ex-Clintonite Shapiro sees the real problem:
Even if the war on Saddam and terrorism costs $300 billion—double the higher estimates—that will still be less than one-fifth of the 10-year cost of the president's tax cut and barely one-third the cost of the president's other defense spending increases.Tax cuts, i.e., allowing people to keep their own money, are "costs"?