Teaching the Dismal Science

Attitudes toward President Obama have changed drastically since last year here in western Maine. I just finished correcting my final batch of about six dozen elderly interviews which I’ve been assigning to students around here for thirty years. There will be no more since I’ll become a former history teacher after Friday. Students select someone seventy years old or older. ask the twenty questions I give them, and then ask ten they make up themselves. One assigned question asks who their favorite president was and why. The other asks who their least favorite president was and why.

Answers to the first question have always varied widely with no president getting a majority. However, a plurality each year for the entire thirty years has gone to Franklin Roosevelt. As for why, the typical answer has always been that “He got us out of the Depression.” Last year, President Obama got quite a few endorsements for favorite president - about fifteen or so if I remember correctly. Most people said things like: “He’s turning the economy around,” or “He’s going to help the little guy,” or “He’s very smart.” This year, however, only three people indicated that Obama was their favorite president. Instead, he got about fifteen votes for least favorite - second only to Richard Nixon.

For the past three years or so, George W. Bush was selected by about fifteen people for least favorite president but he was only mentioned three times this year. Evidently people in western Maine hold Obama responsible for our weak economy, even though he’s has been blaming Bush for nearly three years now. The bloom is definitely off the Obama rose if my informal annual polling is any guide.

One lesson from all this is that James Carville’s “It’s the economy, stupid” advice to his client Bill Clinton in the 1992 campaign sustains today. More recent histories like Amity Schlaes’s “The Forgotten Man,” question the enduring myth that President Roosevelt “got us out of the Depression.” She makes a strong case that his New Deal policies worsened and prolonged the Great Depression rather than ended it. Roosevelt surrounded himself with big-government control freaks who were fervent believers in the ideas that came to be known as Keynesian economics after the late British economist John Maynard Keynes. They borrowed and spent with the notion that they were priming an economic pump, or jumpstarting an economic engine which would rev up under their hyper-regulatory direction. They went off the gold standard and set the value of money by fiat. The Federal Reserve went along, just as it is going along with Obama’s new-New Deal now.

None of it worked, but Roosevelt seemed to be doing something. He convinced enough people in his fireside chats that happy days were here again, even if they weren’t. President Obama and his economic team are using the same tactics and getting the same results. Keynesian economics didn’t work for Roosevelt and they didn’t work for Johnson, Nixon, Ford, or Carter either. What’s it called when someone tries the same thing over and over, expecting a different result?

Reagan, by contrast, believed in the ideas of Frederick Hayek, who suggested that government should stay out of business affairs and let markets work things out. My students studied the conflicting economic ideas of Keynes vs Hayek this year and how they’ve played themselves out in the 20th century. John Papola and Russ Roberts put together a clever rap video outlining the conflicting ideas of the two economists, the refrain of which states: “They’ve been going back and forth for a century. ‘I want to steer markets [says Keynes];’ ‘I want them set free [says Hayek].’”

My students loved it so much they were singing it in the hallways by their lockers after class and showed it to their parents on Youtube. Then last month, an equally clever Round Two was produced. Lots of ideas were packed into the lyrics and imagery in each and both moved very fast, but they were great motivators in my quest for students to learn principles of what many refer to as the “dismal science” of economics.

My hope is that at least some of my charges will go away with a conceptual understanding of what government’s role in the economy should be. Maybe that will at least partially offset the enduring myth that Keynesian economic policies worked under Franklin Roosevelt.

Voters, meanwhile, are trusting their own judgement on how those ideas are working out under President Obama. Let’s hope that’s reflected in the 2012 election results.