A professor at the University of Chicago for more than 30 years, Gary Becker is a founder of the Chicago school of economics. A winner of the John Bates Clark Medal and of the Nobel Prize in Economics, he is also a senior fellow at the Hoover Institution.
The U.S. economy grew robustly from 1983 to 2008. And then everything collapsed. What happened? Gary Becker apportions blame and grades the Bush administration's response to the financial crisis: "He [Bush] wouldn't get an A. But I wouldn't give him a C either." Becker also rates the initial and continuing response of the U.S. Federal Reserve to the crisis. Finally, when confronted with the dilemma of how to create economic policy amid conflicting opinions by expert economists, he puts his faith in the people: "What I trust with the American people is that they have always had a lot of common sense. And I think most Americans believe, and I think they are correct in that belief, that the private sector has shown that it performs better overall, not 100 percent, but…a lot better overall than the public sector does."
Bio
Gary Becker
A professor at the University of Chicago for more than three decades, Dr. Gary Becker is a founder of the Chicago School of Economics. He is a winner of the John Bates Clark Medal and the Nobel prize in economics.
Peter Robinson
Peter M. Robinson is a research fellow at the Hoover Institution, where he writes about business and politics, edits the Hoover Institution's quarterly journal, the Hoover Digest, and hosts Hoover's television program, "Uncommon Knowledge."
Robinson is also the author of three books: How Ronald Reagan Changed My Life; It's My Party: A Republican's Messy Love Affair with the GOP; and the best-selling business book Snapshots from Hell: The Making of an MBA.
Measures employed by governments to influence economic activity, specifically by manipulating the money supply and interest rates. Monetary and fiscal policy are two ways in which governments attempt to achieve or maintain high levels of employment, price stability, and economic growth. Monetary policy is directed by a nation's central bank. In the U.S., monetary policy is the responsibility of the Federal Reserve System, which uses three main instruments: open-market operations, the discount rate, and reserve requirements. In the post-World War II era, economists reached a consensus that, in the long run, inflation results when the money supply grows at too rapid a rate. See alsomonetarism.
Gary Becker makes sense. His opinion as to why he did not believe the stimulus was hugely successful was interesting. He said the time it takes to ramp up government spending means it is too slow. Quite persuasive.
So then, how do we separate the impact of artificial stimulus from normal recovery that will occur without external prompting? Certainly people have a natural resiliency and bounce back. Just how deep must a recession like the last fall before that natural resiliency kicks in may be unknowable.
Nonetheless, it would be useful knowledge for the next recession.
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