As I have said before, ends of semesters are always bittersweet. I have done my best to engage with over a hundred students, to equip them to go to the next level. UC Berkeley Economics Department has once again earned a #1 ranking (I would like to believe not in spite of me.) And so, once again, I will be sending my graduates out to the best think tanks, financial houses, and graduate schools in the world.
And, yet, they know — and not only because I have told them — that today’s policy makers do not pay a great deal of attention to what they have learned over the past four years. Did they listen to my students, we could make short work of the economic troubles facing us. On the other hand, did we live in a world where policy makers set policy with the aid of scientific research, these troubles would not seem nearly so daunting. This, evidently, Cambridge economist John Maynard Keynes already knew when he wrote his article “The World’s Economic Outlook” for the May 1932 Atlantic Monthly.
I hope that in the future we shall not adhere to this purist financial attitude, and that we shall be ready to spend on the enterprises of peace what the financial maxims of the past would only allow us to spend on the devastations of war. At any rate, I predict with an assured confidence that the only way out is for us to discover some object which is admitted even by the deadheads to be a legitimate excuse for largely increasing the expenditure of someone on something!
Find a “legitimate excuse” we did. It was called World War II. And it solved the problem almost instantaneously; at a cost of $1T and 80M lives.
Perhaps mastery over economics is not a sufficient answer after all.
Which reminds me. Ann Coulter is speaking on our campus this Thursday. Her topic: immigration. In a better world she would have enjoyed the care and attention she deserved as a young girl; her parents would have spoken to her about the complexity of the world; and when it turned out that she suffered from psychiatric problems that went beyond talk therapy, she would have received all of the care and treatment she deserved. Instead she grew up in a family whose parents hung upon ever word uttered by the alcoholic demagogue from Wisconsin, Joseph McCarthy. They taught her that we live in a dangerous world where the weak should not be coddled, but rather should be disposed of (discretely if possible). And, thanks to the academic freedom that prevails on U.S. university campuses, Ms Coulter found the “Objectivists” at both Cornell and Michigan who reinforced her conviction that the weak deserved to whither away on the vine. She would not be weak. She would be strong, strong like her idol Ayn Rand.
But this is neither here nor there. Psychologically unstable, abused individuals will seek comfort where they can find it. The fact that there are so many smart people who reject her version of the world simply proves that the liberals really are out to get her. Remember: it’s a dangerous world in which only the strong prevail. Right Ann?
The real point is that had U.S. policy makers passed the policies that economic science told them they needed to pass way back in 1947, when the U.S. was standing atop mountains of war-generated capital stock — had they truly universalized the educational franchise; had they implemented single-payer universal healthcare; had they tasked Detroit to build a state-of-the-art high-speed national and urban rail systems; and had they leveraged their post-war economic position on behalf of, instead of against, democratic, post-colonial movements around the globe — the number of souls attracted to Ayn Rand would not even have amounted to a trickle. When, to the contrary, they put their stock in a pay-to-play educational franchise tilted heavily toward the wealthy; when they deep-sixed public and high-speed rail and put their weight behind the private automobile; when they placed our nation’s health in the hands of private insurance providers; and when they put our earth in the hands of an industry that could only make profits by destroying the earth — they created precisely the world that makes Ayn Rand and Ann Coulter seem normal. No, seem virtuous.
My students know — flawlessly — the mechanisms that have generated the kind of world where Ann Coulter’s fear and hate-mongering not only survive, but thrive. They can identify the policies that, eventually, would eliminate Ann Coulter’s audience. In attendance would only be those mentally unstable, abused, tragic misfits who fell through the cracks of an otherwise robust healthcare system.
2017 is our 1932. Rant and rail as he might throughout the 1920s, even Lord Keynes was unable to prevail over the world’s leaders. They had bigger fish to fry. They were “making X [fill in the blank] great again.”
And, so, just as I have every semester I have ever taught, I renew Lord Keynes’ appeal; not to my students, who have already mastered these lessons, but to my students from four, six, eight, ten years ago — who evidently have forgotten them.
Remember? Before you joined the staff of the WTO and World Bank? Remember? Before you joined JP Morgan, Goldman Sachs, Merrill Lynch, and Morgan Stanley? Do you remember what you swore to yourself you would do, and what you would not do?
It is 1932. You are now the decision-maker, the policy-maker. Six years ago you graduated from the No. 1 economics department in the United States. You now live in a home valued at between $1 and $10M. You control assets that are in line with those I told you you would control — four, six, eight, ten years ago. It is 1932. I am asking you to do the right thing.
And for those of my students who are walking this Spring? I have talked with all of you. You are receiving a bachelors degree from the No. 1 program in the United States. Congratulations! You are moving on, some of you to prized internships; some to financial houses; some to graduate schools. Congratulations!
But, it is 1932. And I am begging you to think clearly about where you are and where you are going. My former graduates? They are kind of locked in. They are terrified by their choices. They have clients. They have responsibilities. They want to do the right thing.
It is 1932.