Hip Figures: A Literary History of the Democratic Party (Post*45)


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2. Black and White Unite and Sweat and Swing

History 19th century. United States Politics and government United States Politics and government Philosophy. Summary Scope and content: "Examines why the Republican Party was unable to sustain Lincoln's ideas and why neither Republicans nor Democrats were able to formulate an alternative public philosophy to Lincolnism. Sand describes how radical Republicans and purist Democrats battled for control of America's public philosophy, and how moderate Republicans and legitimist Democrats placed issue and policy debates over ideology"--Provided by publisher. Live circulation data is not available.

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Open University Library. University of Oxford Libraries. Keyserling introduced strains into our relationship and resented any exclusive contact of the chairman with the President. But he tried to establish, and did establish, his personal relations with Clark Clifford, the President's close adviser.

That developed into such strains that I said to myself, "If I try to live with this for. Keyserling and Mr. Truman and so forth. I'll step aside. Colliers magazine some months after I left published an article of mine, they wanted to caption it on the front, "Why Dr.

Nourse Broke With President Truman. I said, "That's ridiculous. Little old Nourse to break with the President of the United States. That's got things all out of perspective. Keyserling: He did not have a doctor's degree in economics, did you feel that that left him somewhat ill-equipped to handle the job, or did you feel that he might have felt somewhat insecure not having the Ph.

Did that grind him, to think that they talked about Dr. Clark and. Nourse, and Mr. He knew perfectly well that he had made himself a competent economist, and they all have their biases. Although he was as competent as more than half of the profession, he didn't have that recognition and it bothered him. So it was an inferiority-superiority complex there that was very trying on him and made the relationship trying.

Truman's view of the functions or duties of the Council of Economic Advisers when it was established. What was the role that Mr. Truman saw for the Council? Truman was a formal supporter of the Murray Full Employment Act, and of the Council, and he wrote a letter of genuine endorsement when the act was passed, but he didn't know what it was all about. News and World Report once had a lengthy survey of opinion about Mr.

Truman and one of the things they said is: "Mr. Truman is uncomfortable with scientists and economists. They are too precise and logical. He works on a different beam. And that meant that. In his decisions he turned automatically to business people, political people, including lawyers, and he relied very strongly on Clark Clifford who was his legal adviser.

He was figure-minded and he relied very strongly on Jim Webb who was Director of the Budget. You see they had a set of figures which we developed into economic indicators and that was the one thing where Mr. Truman made his most effective contact with the work of the Council. He had a leather-bound, short version of economic indicators each quarter. And I would take that to him, and take all the Council members, we'd go to him and we'd say, "Mr.

President, here are the economic indicators with ten out of the thirty-two," or whatever we had there, "which we regard as most significant and worth watching, and here are our comments on those. And he said to me one time, he reached into the right hand drawer of his desk, and he said, "Yeah, I keep this here all the time, and when people come in and talk to me about this, I say, 'Here are the. Truman said at the time of the swearing-in, "Now you gentlemen just keep this national figure up to two hundred billion dollars and we'll be all right.

And Flash's interpretation of that statement is that in your opinion Mr. Truman had not given extensive thought to the use that he would make of the Council. Is that the impression that you meant to convey? It wasn't a thing that he was anguishing about. He wanted to go down to Key West and get a vacation, you see, and he was trying to clean up these other matters that he was more interested in. In my book I quote a letter that a group of organizations wrote him needling him to make the appointments, saying, "Here we've got the act passed, but it's got to be brought to life by your appointments.

I've got to get this thing through before I leave for Key West," and that was the way. You see, my first problem there was to get the Council accepted at Cabinet level, as the Congress had intended. I don't think the Secretary of Labor had, I think Agriculture did. Snyder was definitely interested, and curiously enough, Forrestal was. When I sent the first reports around to the Cabinet members, Snyder and Forrestal were the two who made direct written response to me, and Forrestal had some later contacts on it, but more casual, but he brought me into the orientation conferences that he had with the Defense Department on it.

But Snyder went one better and made personal welcome to me whenever I called on him. I found that he was responsive, that he was ready to talk the issues with me. He was no economist himself, but he had an understanding respect for economics. I could always get an appointment, I always felt that what I could get of mutual understanding of with John. Truman the next day.

That is to say that they would be mediators between economic analysis and the President's political judgment. And curiously, after a time, Snyder sent me an inscribed photograph of himself and asked for a return from me. When his daughter was married in the cathedral, I was out of the Council, and he invited Mrs. Nourse and me to the ceremonies at the cathedral.

There was a strange little personal rapport there that was very helpful. HESS: At the time that you were appointed chairman, just what did you see as the proper role of the Council, and how did you try to implement that role? I had to formulate my ideas, I had my general personal code of professional moral philosophy. I remember early meeting with the group. I don't know just how it was sponsored someway, but this was a group that had some little study on at GW George Washington University.

The head of the department. They rather put themselves at my disposal to kick around that very question of what it should be, what they thought it should be, how they thought it should develop and what I thought, and of course, Clark and Keyserling were there. So that was a very good symposium between the people who were off the Council but interested in it, and the members of the Council.

This helped us to formulate our ideas for the Council's role. HESS: Did you get some pretty diverse opinions from all of the various advisers as to what the Council could do, or were they pretty well united as to what they saw as the proper role of the Council? NOURSE: Well, they were united on the idea that it should take an activist position with reference to the role of the government, and the Council as advisory to it.

I'm not so clear in my mind as to how much they stressed what I stressed very much, namely the degree of professional, I don't want to say "detachment," professional…. That goes on to the whole question of the later particular Helleristic interpretation. Certainly Keyserling would expound a more participatory role, and members of that group, although I don't spot them directly, I'm sure stressed that.

You want to get in there and do things. Now I wrote to [Walter W. I said to Heller, "If you had been the first chairman of the Council, you would have had to take a different posture than you took with Kennedy. If I had been chosen by Kennedy I would have been glad to take a more positive role than it was feasible for me to take when starting to inject the Council into the Cabinet system, and Truman's interpretation, because you know, his ultimate position was, 'I won't have anybody with Cabinet rating that isn't a member of the Cabinet. When he came in the second term, he demoted.

The notion of Cabinet rank had been a mistake. Truman's change was right, but his reasons for changing it were not good reasons. HESS: Do you recall what the occasions were that called for your sitting in on the Cabinet meetings two times? I think -- no, I shouldn't honestly, I shouldn't put it on the record. The second one was in the summer of. NOURSE: That was the one time when the President put a question directly to the Council to answer and advise him on, and I'm sure that was on the motion of members of that group rather than on his own motion.

We were so little in agreement that two reports were filed. I filed a separate report but since I left the Council a couple of months later that was no real follow-through. NOURSE: If his relationship to the Council, and intentions for the Council, had been different them he would have wanted, he would have found times when he'd say, "Well, we had better let you discuss this with the Cabinet, let the Cabinet examine you on this, let the Cabinet see what you have to offer as well as the President," but I don't think they should pro forma sit in on all.

HESS: Would he have been better served if he had made use of the services that were available to him? Could he have used the Council of Economic Advisers in a better way? You see his pattern was formed through his business and political background and so forth, and so he had to operate according to his likes.

Availability

What accomplishments were made and what would you have liked to have seen accomplished that was not accomplished? I made it clear that the Council under my chairmanship was going to be a professional body. The second part of that was that it was going to represent the whole profession. I wasn't going to staff it with people who just agreed with me, and.

Keyserling and Clark both turned the staffing pretty much over to me, and said, "You know these people, the problems better than we do, now you take the lead on this. I wanted them to be representative of the profession, to let the staff and Council work together, to serve as a forum for discussion. Now the profession recognized this.

After I left I spoke briefly at a meeting of the American Economic Association which discussed this problem.

Some Literary Criticism quotes

Paul Strayer and I forget who else were speakers, and I spoke briefly. And a friend of mine afterwards said, "My, that meeting gave you an ovation of endorsement of your making it a catholic representative professional body. HESS: While we're on the subject of the staff, would you tell me just a little about each of the men who were. The assistant to the chairman was Bertram M. Gross, what did you know about him, why did you bring him on? A member of the Council, other than me, offered him the post of assistant to the chairman.

NOURSE: I brought him in and said to him, "Now, I'm not going to turn the running of the Council over to you, I'm not going to make you administrative assistant in that sense, as assistant chairman, anything of that sort. You know, you've been in all sorts of connection here in Washington, you know the ropes, and you can be of great help to me in that connection, but policies and decision will be mine. You're not to make them independently. So to transplant that work over here, and you with it, is something I devoutly wish and need, but it is not turning the staff work over to you.

I'll keep that under my directions. I think that smoothed the situation over. What I did was to establish a group of three and said, "You will be responsible for all this National income, statistical and interpretive sort of work. And I'm going to make Paul" -- he had a great facility for writing -- "and I'm going to make him the chairman for report writing and. He was a very competent statistician and we had a lot of statistical work. So you see, we had the analytical member, the literary member, and the statistical member, the three working together as a group to carry on the work of the staff and communicate back to the Council, and from the Council to staff workers in the preparing of reports and so forth.

And it was a very satisfactory arrangement. They were three extremely able men. HESS: We have several others to discuss, but just in general, just how did you prefer to assign your staff work? Did you have meetings in which you would assign different people jobs, or would you call people into your office at various times of the day?

Just how did you handle your staff work? One, Keyserling sort of nominated himself as responsible for whipping reports into shape as they came from these. So he did a good deal of that sort of thing, he took it out of my hand somewhat. If I had been satisfied with just the standards that he applied to it, I would have been glad to have that arrangement as a partnership, but it wasn't quite that easy.

I'd like to put in a footnote here, that although there was strain during my time on the Council, Mr. Keyserling and Mrs. Keyserling, who as you know was head of the Women's Bureau, a professional woman in her own right, that we established a friendly relationship and entertained back and forth, with mostly their entertaining me at dinner. And I think it was after my wife died they entertained my sister several times and then entertained me alone. And, we've had Christmas cards and interchanges, and he sends me the publications of his organization and I send him stuff, and get comment and exchange back and forth.

It's a nice professional friendship and that has continued right on down. I want to put that in a footnote because the question of antagonism has been overplayed. We had another one first, but just on loan from the BLS and when he went back we brought John Davis in. Davis was an able labor economist and had a good combination of objectivity and commitment to the cause of labor, a very satisfactory relationship. Another one I want to highlight was that of [Donald C. And so I went gunning for him. You see, in making up my staff I went after people who were coming out of government agencies.

I went after Willard L. Thorp who had been Assistant Secretary of State and, oh, I don't know, I tried for this chap up at Columbia, I can't think of his name. To Don Wallace I said, "You're going back to run the Woodrow Wilson project back at Princeton, but that won't start for a year, and you're coming out of a government agency, OPA, and you need about a year in a decompression chamber between government. NOURSE: Yes, Hoover you see had specialized at the University of Michigan in location of industry, and that was a question in the rehabilitation from the distortion of war plants to get back to continuing peace plants, so he was a specialist in that field.

He had worked with a number of business associations, and was a well trained economist. He was another specialist that I fitted into the group. And I know Homan said about him one time, he said, "He knows so much more than the rest of us that there's no comparison. Well, that was a slight exaggeration, but I've heard Kermit Gordon after Salant was there at Brookings make almost as extravagant a statement about his capacity. A wonderful person and a very fine economist.

And that was a field that we needed to work on. Colm had it for the fiscal side and Salant had it for the monetary side. Those two made us very strong on this. Several of the people I approached demurred; "Oh, I'd love to come on, but I've been away from my academic work for so long and my children are just coming on to the stage where I must get them back on to something permanent, so we can't come. I went after him hard. There were a couple of others, I don't happen to recapture the names now.

HESS: There were some differences of opinion as to whether the members of the Council should testify before congressional committees. Do you recall anything about that? NOURSE: My point was that the Council should be professionally free to discuss the nature of economic issues with the President, and to make as clear as possible to him what consensus there was in the Council, and more broadly in the profession, and what differences there were, and that should be confidential to the President.

Assistant Professor of English and Comparative Race and Ethnic Studies at TCU

We should not be out revealing our personal opinions and the advice that we gave to the President. Either we would be yes men just saying that we agreed with what the President did, whether we did or not, or else, they would say, "Well, these professionals advise the Council to do this, and he did this other, and they drive a wedge between us," so I said, "We had better just keep our mouth shut. Some people said I was inconsistent because I went out and talked to various meetings, not a great number, but I think there were some fifty over the three years, but in those talks I discussed the nature of the issue, as economists understood them, rather than making myself a protagonist for a certain interpretation.

And that was true in what I said at Forrestal's orientation conferences. I tried to define the issues between military and civilian expenditures and so forth. I thought I could discuss it up to that point, but not propagandize or try to get them to take a particular position rather than to take an objective view of national interest. This brings up the subject of defense spending; how much could adequately be spent on national defense, what would be too much, and what would perhaps not be enough?

As you will recall, there was a period of time following the Second World War and before the Korean invasion, in which appropriations for defense spending were cut back. Several people have been mentioned in that connection; Louis Johnson for one. Forrestal had a more objective attitude, and I think he wanted to get the benefit of professional advice on that problem, but he had temperamental difficulties which ended in a suicide, as you know.

He called me up, or his secretary, his office, called up one day and my secretary came and said, "The Secretary of Defense is inquiring whether you could have lunch with him in his private dining room," on such and such a date. And I said, "I must. We'll arrange the program so that I can be responsive. When the Secretary of Defense makes that approach to me I must be responsive regardless. I went over there and his people met me, and ushered me into his private dining room. I looked around to see what the pitch was, no one was there. They said, "The Secretary will be with you as soon as he can get himself free in a moment.

After awhile he came in and greeted me and the stewards started serving a lunch, and we engaged in chit chat about matters in general during the lunch. And as time extended and the meal was finished I thought, "Well now he'll spring the question which he's been a little. Carpenter said, "I must get back to my shop. Forrestal, if this is all you want to discuss with me, I'd better get back to my shop," and that was that.


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NOURSE: Now there was just a psychological block as I understand it, that prevented him from communicating from his side with me, where he wanted to get advice probably on that very question…. NOURSE: Yes, because you see, he had brought me into two or three reorientation conferences where he had government people and business people and the public interest widely represented and he had just invited me to come in and speak my piece. He just had a block. And this is only my supposition that that was the question he wanted to raise, but that was so much the issue at the time and his orientation conferences pointed so much in that direction that it seemed clear.

Johnson made it immediately and sharply clear that he held me personally responsible for having given the President bad advice on this, given him the wrong economic priorities. HESS: Johnson made it clear that he thought you were responsible for the cutback, is that correct? And I opened it this way saying, "An economist coming into a Defense conference here is likely to be about as popular as the polecat at the Bishop's garden party. You Defense men [I was talking to them], and the Defense Department have a professional commitment to give the country the most adequate defense that your expertise indicates is needed and possible.

The economist approaches it from the other side. His priority is for letting as little of the gross national product as possible be drained into the non-productive, and even the destructive expenditure, of military expenditures. And in that, naturally, the Chairman of the Council of Economic Advisers would be bound to be concerned in trying to see where defense expenditures could be held down. And the Secretary of Defense would be. HESS: According to my understanding of the situation, Louis Johnson did want to cut back on the defense appropriations at that time.

And I could be wrong, but as you may recall shortly after he came in he cancelled the contract for the super carrier, down at Norfolk, the U. United States. That's true, he was not a bigot on it, he was not a drum thumper on this, but he said, "There is a place where we could save something, but I don't want anyone over there in the economics department to make a broad definition of the degree of spending. We should do it here, where we think savings can be made, not where they think the total adjustment between military and civil defense is made.

Now perhaps it was my fault. You see that was close to the time of my leaving. I was busy with liquidating my office then. HESS: That's right. He took over on March the 28th of This is a question that interests historians. In the cutting back on defense appropriations and the cutback in the armed forces, if Louis Johnson was merely following the orders of others, merely following the dictates of the budget as it had been presented to him, or whether he, himself, was zealously going further and making cutbacks on his own over and above what would reasonably be expected of a man in his position.

Do you think Louis Johnson was just carrying out orders when he cut back on the armed forces? And that is why there should have been something like the abortive Forrestal thing. If he had approached me and said, "Now, Nourse, we seem to be a little out of step on this thing, can't you come over and discuss this so we can have an exchange of views there," that would have been wonderful.

It would have been wonderful at Forrestal's stage and it would have been even more immediate and pressing in the Johnson situation, and you might say,. What do you recall of his views on whether the armed services should be cut back at that time?

And he was a great help to me because the President was figure-minded and Jim was his figure man. If we gave Webb the economic analysis that oriented him it would become immediately effective with the President. Now neither of us did that, but that's what should have been done in the development of the Council. Now if the things had been going beautifully and I had been planning on the future and been smart enough to see that, you can see how the Council might have developed under a different President with an attitude such as Eisenhower had with reference to [Arthur F.

In my judgment theirs was a high mark of Council performance of President and Council, a mutual performance. Just for the record. He knew, by experience and contemplation, because he had full comprehension of the nature of staff work, that's part of the military setup. He valued staff work. He thought that in Burns he had the top staff man to advise him. And so there was an approach from both sides there. Arthur had established a long relationship with Eisenhower which I had never had with Truman.

Truman was a different sort of a person with a different sort of a background. Eisenhower could immediately call Arthur in and say, "Now, what about the economics on this? Burns said to me when I asked him about how he was getting on with this, he said, "Well, Eisenhower has a good mind, is an excellent listener.

I had my memorandum, I had it worked out very carefully, of the agenda that I want to discuss with him and the way I want to approach it. So, he expects me to do that. We know what the question is that I have raised. Burns was acting in a different situation because he had that relationship, but at the same time, Eisenhower had George Humphrey, a hard-shell businessman as his other top adviser from the field of practical business. So he had to reconcile the economic analysis and the practical savvy of the top-flight economist with the practical and biased savvy of an executive out of the steel industry.


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So that was a flaw in the perfect working of the situation, but as I say, I think that was the high point of the President-Chairman relationship. A thing on which I had generally recognized expertise, was the question of agriculture's part in the national adjustment. The Brannan plan was a proposal which I thought had serious twists from sound economic analysis.

And so that was the time when I thought it was appropriate for me to approach the President. So I set up an appointment and I was there all alone with the President, and I raised the question of the Brannan plan. And I think this is in my book. The President said, "Oh, I think Charlie's got something pretty good there," and that ended the discussion, that shut me up. What the President meant, I think, "My intelligence makes me believe that the Brannan plan is going to give me strong agricultural support.

Brannan's got something pretty good from the political standpoint and that's where I have to operate. The other case was in connection with a steel strike. I sent a note to the President suggesting that the Council would be glad to discuss the matter with him as to its impact on the economy and desirable terms of settlement. He brushed off this suggestion, however, and turned the matter over to his assistant, John Steelman, and we had no opportunity to participate.

So there I think those two episodes, or those two descriptions, contrasted, of course the Heller-Kennedy and later Johnson relationships are something else again, because the nature and success of the Council,. Steelman or Clark Clifford for instance? And I'd go over to Steelman's office, or I guess sometimes he'd come to mine, and discuss a problem. Now you know he had been a sociologist down at the University of Alabama wasn't it, and in labor relations primarily. So he liked to make the most of his professional qualifications.

I was perfectly willing to discuss economic problems with him on a professional plane, at the end be would say, "Yes, we economists understand this, and I will explain it to the President. HESS: Do you think that he was an effective channel of communication for your thoughts and ideas?


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But it entered into his thinking and fell within his limitation of how much he could -- I don't know how hard he would have argued for my questions about the soundness of the Brannan plan or about cutbacks in defense or something, I don't know anything about that. NOURSE: Well, he'd been exposed to social science thinking, and the social viewpoint, you see, with reference to labor problems and social reform and that sort of thing. He was not, so far as I ever discovered, a skilled. The same way, neither Steelman nor Snyder was a professional economist, but I could have fruitful discussion with them, which in some degree I thought we carried over to the President.

Take Burns with the President. Burns would give him all of the economic tutoring that he could in the situation and then how much of it Eisenhower absorbed and accepted and would fight for against George Humphrey nobody knows. Of course, that's the name of the game. Clark Clifford had had intimate relationships with Keyserling and in the group that wrote the Full Employment Act and so forth, and he came in there and sensed, I interpreted, as being a special relationship between the chairman and the President, whereas Keyserling said.

I went into Keyserling's office and said, "Well, how come the Council matters are not coming through channels? Well, what could you do, except resign? Keyserling upstairs and we can't move him sidewise or downstairs, because he'd raise merry hell with his supporters outside. So that was it, and the President's response to my resignation, which he never mentioned to me, was to have Steelman invite me to luncheon at the Mayflower and say, "Well, we're very sorry that you have decided you have to leave the Council.

What are your suggestions as to men who you think would most adequately fill the post of new chairman? And I mentioned names, and they approached at least two of them to my positive knowledge, probably more, and they responded, "As economists we recognized that Nourse is licked on this professional issue, that if he couldn't function in that position [because I'd had twenty years experience in Washington, a half a block from the executive office, I'd had some savvys some didn't have], if he couldn't make it work on a professional plain, we know we'd be licked before we started," and they declined.

And so after a wait of six months, well, really from September to the following April or May, with no other solution in sight, they made Keyserling chairman and picked up a new third member, Roy Blough, a very good man. I'll say that for them, they always appointed good men. Blough was from the University of Chicago, experienced in the Treasury Department, a splendid man, a lot of savvy on the financial side. HESS: Getting back to the cutback in the armed forces, do you recall what President Truman's view was on the reduction of the defense appropriations?

HESS: I may have my figures completely wrong, but I think that the military had made a request of seventeen billion, Mr. Truman asked them to reconsider and I think they came down to fifteen billion, and then the defense appropriation that was made that year was further reduced to thirteen and a half billion. Are those figures about right?

He said, "When the President sent out his call for budget figures from all the departments in September he set the figure for the Defense Department at thirteen billion. I do remember that figure clearly. Webb said, "In spite of that instruction by the President, the Defense Department came back with specifications of twenty-eight billion dollars and I, at the President's instruction threw that back at them and said, 'I told you the figure with which to operate and you have completely violated that.

Give me a new set of figures at that level. And it was at that point that it proceeded -- I do remember that figure thirteen, but I was not fully a party to that. I thought he was going in the right direction. I didn't think that economic analysis had anything more to contribute there. I don't believe it did, because. And as I say, I thought it was their decision at that time. HESS: On the general subject of the Budget Bureau, what do you think the President would do if he received conflicting advice from the Council of Economic Advisers and the Bureau of the Budget, or really indeed, is that likely, given the roles of the Council of Economic Advisers and of the Budget Bureau, is it likely that they would give conflicting advice?

NOURSE: Not very likely under Nourse and Webb because it was just at this juncture in the fall when they were making up their budget estimates I remember distinctly that he asked me to come down with the other members of the Council and such staff members as I thought I should bring along to meet with him and his division members there, to discuss this problem, the economics and the arithmetic, and put them together.

We had a good discussion, and some follow-up. The follow-up was at the staff level pretty much and that's perfectly right. They are technical experts on all. And I said that also with reference to the Joint Economic Committee relationships when Oscar Hardy was staff director, I said, "The doors of the Council quarters here are always open to your members -- to you and your members to come over and discuss questions here at the technical level. For you to discuss them with the chairman and the Council, but not for the Council chairman, or the Council members to come up and discuss it with Congress.

Congress, in its wisdom, implemented the Employment Act with two study agencies; at the legislative level through the Joint Economic Committee, and at the Executive level by the Council of Economic Advisers. They gave the JEC a lot more money than we had to staff itself and conduct its studies and ponder our findings. The Council of Economic Advisers had a small staff of experts to service the President, not to service the committee or other committees of Congress. They had a good American separation of powers there which I.

HESS: I thought you gave a very good thumbnail description there of the roles of the Council of Economic Advisers and the Budget Bureau when you said it was the difference between economics and arithmetic. HESS: That's pretty concise, of course, but is that just about the difference between the two departments? You were primarily interested in the economics of the nation and long-range planning, whereas the Bureau of the Budget is interested in "x" number of dollars for this department, and "x" number of dollars for that department.

Harold Smith had probably left He was very respectful, as Webb had been, he carried on Webb's attitude and Webb's helpful relationship with the Council. He didn't last very long, so there's not much more to be said about that relation ship. I don't recall anything that I would want to subtract from or add to that general statement. Lawton, of course, came after you left the Government, is that right?

He was head of the Bureau of the Budget.

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NOURSE: I'm not sure just when his appointment dated, but it was my impression he came in before I left, because I identify him definitely with the executive. And in the pay bill that Lawton shepherded through, either as assistant director or director of the Bureau of the Budget, he must have been one or the other, I think that he shared the view different from Webb, that the Council had kind of cut the wind off the budget sails you see, because they had started under Colm to build up this economic analysis division in the Bureau. I could be quite wrong and I perhaps shouldn't put that on the record.

So the budget carried out the President's idea of differentiating the Council from a Cabinet agency. Lack of understanding of the other fellow's mission perhaps? I mentioned Stuart Rice already, he was one of their top men, had a fine broad view and appreciation. When Gerhard Colm and Mary Smelker came over from the economic analysis division of the Budget they brought a very fine understanding of the problems with which we would deal.

As I understand it, in the summer of , the President set up three special committees to advise him on Marshall plan matters. The first was headed by Secretary Krug of the Department of the Interior, and their task was to report on the drain on natural resources. The second committee was the Council of Economic Advisers committee, headed by yourself, and was to gauge the probable impact of such a program on the national economy. The third was a citizens committee. HESS: What do you recall about the findings of your committee and what is your estimation of the success of the Marshall plan?

First, the findings of your committee. Krug and I each brought the men who we. And General Marshall, Secretary Marshall, made his statement with reference to what he had sprung at the Harvard speech. As soon as he got through, Jim Carey, who was the head of the electrical workers union and a member of the citizens committee said, "Mr.

Secretary, why did you choose Harvard as the place to make that path breaking speech? And Marshall, in his delightful way, smiled a little and said, "Well, I thought that Harvard was just about the respected conservative theater in which a radical plan should be sprung. He made one other remark which is pertinent to this discussion. He said, "People have criticized my appointment as Secretary of State saying that that is not the place for a man of military training and the military mind to function. NOURSE: I think that my personal and perhaps biased judgment would be something like this, to say that it seemed to me that it was a very astute appraisal of the postwar situation and next steps to be taken in that situation.

When it was developed, as it was, into a plan of Communist containment, I think that it lost its scientific character or its sound basis. Now, of course, there are an enormous number of questions of how each particular one of the four phases of the plan was carried out and developed. I thought it was a good start, and we still are wrestling, in both Europe and Asia, with the inadequacies of a solution that we'd worked out from that start.

I don't think that my observations about the development of the Marshall plan, could be taken at all seriously, because I just haven't been a close enough student of that or close enough in touch with it. But I think we might go back on that question of the three committees and why I think that was a pretty good setup. They asked the Department of the Interior to make a technical appraisal of the drain on national resources at different levels of the program, then they turned to us to make an economic evaluation of that.

Then there was the citizen's committee of nineteen, broadly representative of the public interests. I mentioned Jim Carey, the head of one of the active militant labor unions. They had Harold Moulton, president of the Brookings Institution on it, and the other names don't occur to me, but it was a very representative citizen's committee with a wide range of expertise. They were to look at the two technical appraisals, Krug's and mine, my staff's, and then more briefly to debate and see how much they could come to agreement on the issue of how much the government could.

HESS: All right, what do you recall about the development of the Keynesian thinking among economists during the Truman years? Just what was the degree of influence that John Maynard Keynes seemed to have on economic thinking during the Truman period? NOURSE: Well, you see Keynes wrote first his Economic Consequences of the Peace , because he was very close to those affairs, and then he went on to his new interpretation of the complementarity of public. That's what it comes down to, private management and public management, not the old laissez faire idea. The role of fiscal and monetary policy in the economic process was the essence of the Keynes doctrine.

Well that was the essence, of course, of the whole Keynesian approach, and that approach had been taken up by Alvin Hansen, who was adviser to the Fed and I think at the Treasury, was in and out of the Washington scene there and developing an American Keynesism, or activist complementary policy. Back in the New Deal and in the TNEC days, all that was getting into the thought-stream of the country, and then it had its tangible expression in the Employment Act. NOURSE: But you see, the economists today, are talking about our post-Keynesian economics, but the stream goes back to Theodore Roosevelt and the Woodrow Wilson idea of the New Freedom and so forth, and then the FDR application of it in the time of crisis by way of emergency measures, and then its sophistication into a permanent system, outline of a system, under the Employment Act.

And now we are in the stage of what I call the sophisticating of ideas of freedom and equality from the Employment Act declaration. We had a Declaration of Independence back in , and I like to describe the Employment Act as a formal declaration of inter -dependence between government and the private sector. Because if you read that statement of policy, it's the emphasis of the dependence of the different government agencies and functions on each other, and of the government on the private sector and of the private sector on the government, so it is definitely a declaration of interdependence.

HESS: All right. We have mentioned your views of the New Deal. But on page 24 of Edward Flash's book, Economic. Advice and Presidential Leadership: The Council of Economic Advisers , he states that you shared Truman's concern for a "sound money" policy, of living within the Government's budget and consequently of not increasing defense expenditures, but that you had little sympathy with underlying Fair Deal policies.

Just what was your view on New Deal-Fair Deal programs? Lawrence Laughlin at the University of Chicago and had gone along with this market concept of balancing supply and demand through price, the concept of deficit financing as an implement of adjustment didn't come into my training experience very much up to that time. In what I'm writing on this book of mine now, I see a retention of my general approach, which is against heedless incurring of deficit or over-optimistic appraisals of a self-refunding process.

Take Hansen's phrase, "doing the job pays the debt. If you spend, if you incur deficit expenditures, as corporations regularly do, to increase future productivity; if you. But just to say, "Doing any job will pay a deficit incurred in doing it," that of course, is nonsense. That is the area of acceptance of deficit spending policy that I have reached.

I have moved from a conservative view that the budget should be balanced within the span of a business cycle to a longer view. When you take longer views than that, you are tapping larger potential power. You also encourage larger potential dangers. And that's what seems to me the situation that we have got into of instead of resulting in full employment and the maximum potential GNP that a lot of the stimulus has been diverted into inflation, and Keynes himself warned against that.

He said, "If you have unemployment and you incur these deficits and so forth, up to a point, that is a solution of that kind of problem, but if you handle it so unskillfully that it gets into inflation, then the policy defeats itself, or you come to the limitations of the policy. HESS: To use two terms, liberal and conservative, would you describe your views as liberal or conservative? How do you view yourself? I can be described either as a conservative liberal or a liberal conservative.

That is, I started rather on a conservative basis and then liberalized, but still my temperament is definitely liberal. So, I think it's better to say that I am innately a liberal but with some cautions. I would be daring but not reckless. HESS: What limits would you place on your liberalism? What do you think needs to be guarded against? NOURSE: I think that mathematical economists are often so bemused by their calculation of how a particular amount of expenditure, will through the multiplier factor so fructify the economy that it's bound to pay off.

Now my cautions would be that people will not respond in any mechanistic way. A given stimulus, which in your analysis, ought to produce a given increase in employment, may be diverted into increased savings. You will have a short fall in the development. Hence you had better make your program somewhat less than what your theoretical calculation of the full cruxification would indicate.

HESS: While we're speaking of liberal and conservative; on the scale of liberal to conservative, where would you place Mr. Put him a little to the liberal side of the dichotomy; which isn't a true dichotomy because everyone has too many different phases of his thinking. He may be very liberal on something and then another place where he's quite conservative. You'd be interested in this story. After Jim Webb left Washington and got into business affairs he invited me out to talk to their business people. And the people from the university came up to hear that speech and asked me to go down to Norman and talk to their students.

So, a May afternoon, hot as the dickens, they had a wonderful turnout of students to see what this. And I was introduced by a professor who said that he had made me the subject of analysis as to this economic liberalism issue, or economic theoretical position, in a graduate class of thirteen. They had thirteen appraisals of me as conservative or liberal, from top to bottom. And I turned up as number seven. On certain things, now take for instance my liberal thinking in behalf of agricultural organization and the building of big cooperatives and that sort of thing, that's distinctly liberal in tone.

In general, I think as of now, what I have developed into as an elderly social scientist, is distinctly liberal. Truman's liberal or conservative stance. No one was quite certain, including Truman himself. Truman was as uncertain of his position as to whether he was a liberal or conservative as Mr. Phillips seems to believe, or does this hark back to the fact that Mr. Truman could be liberal on one subject and conservative on another, as you have mentioned?

He didn't raise the question, "Am I a liberal or a conservative? And what tags they pin on me I don't care. I hope they'll think I'm a good President, but I don't want to be classified. Truman's ability to make a decision, did you ever have any difficulty in getting a decision from him? Yes, it was in the letter, the final letter that he wrote me disposing of that issue this way: He said, "I understand your [or I appreciate, I respect, or whatever, I don't just know what word he used], I see why you think you shouldn't go to testify before congressional committees.

If you don't want to go you don't have to. If other members of the Council think they should go and if they want to go they can go.

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So he was making exception there. The real pattern of the White House practice was to deny files to committees and so forth. That was his basic attitude, that the executive branch could not be pushed around by the legislative branch. But he said, "Here are these fellows, if they want to go I don't have any objection. HESS: On the subject of the economic report, could you tell me about the procedure of writing an economic report and just how closely Mr.

Truman may have watched and may have paid attention to what was going on during the formulation of the report? The Congress had told him to make an annual economic report and had set up an agency to assist him in preparing that report. Truman, in effect, said, "All right, let the Council of Economic Advisers write the report and bring it to me they are economists. Then, he said, "These are my budget figures. Then in the report of , he did become involved, he was faced with this anti-inflation problem which had been with him from the beginning.

He worried, as we did, about the inflation problem from the start and the Council always had that note in the reports. In coming up to the campaign, he called from Key.

Hip Figures: A Literary History of the Democratic Party (Post*45) Hip Figures: A Literary History of the Democratic Party (Post*45)
Hip Figures: A Literary History of the Democratic Party (Post*45) Hip Figures: A Literary History of the Democratic Party (Post*45)
Hip Figures: A Literary History of the Democratic Party (Post*45) Hip Figures: A Literary History of the Democratic Party (Post*45)
Hip Figures: A Literary History of the Democratic Party (Post*45) Hip Figures: A Literary History of the Democratic Party (Post*45)
Hip Figures: A Literary History of the Democratic Party (Post*45) Hip Figures: A Literary History of the Democratic Party (Post*45)

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