Recession jitters abound. As the longest economic downturn since the Great Depression drags on, there’s growing popular unease, not simply with President Bush’s economic stewardship, but also with the long-term economic prospects for America. Yet while polls indicate the public wants action from the national government, the president and many prominent “mainstream” economists have adopted a cautious wait-and-see strategy.
Despite the assumption by numerous elite opinion makers, from conservative to liberal, that government borrowing and federal deficits will have hideous consequences, Eisner’s arguments have little by little won some grudging respect. Oddly enough, he has been embraced most ardently by Reaganite supply-siders and traditional liberal adherents of an expansive government.
The United States should provide generous financial aid to the former Soviet republics, just as we did to western Europe after World War II–for our economic benefit as much as theirs.
To keep abreast of policy debates, he also reads the general press–the New York Times, the Wall Street Journal, Le Monde, Business Week, and Newsweek–though he says, “Press coverage [of economic issues] frequently appalls me.” He reads and frequently contributes to Challenge, a bimonthly magazine that makes economic debates understandable to the serious but nontechnical reader.
Eisner’s mother, an English teacher, died when he was 14, the same year he entered City College of New York. His father, a math teacher, urged him to be “a leader of men,” and he developed an interest in history and the social sciences. It was a radical time for student politics: though Roosevelt won a campus straw poll for president in 1936, both the communist and socialist candidates outpolled Republican Alf Landon. Following in his grandfather’s footsteps, Eisner remained a political independent and hoped he could bring together warring left-wing groups.
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Mainstream economics had undergone a revolution under the influence of the brilliant British thinker John Maynard Keynes, and Eisner became a leading American advocate of Keynesian ideas. Keynes had argued forcefully during the 1930s depression that, contrary to prevailing academic convictions, capitalist market economies were not always self-correcting. They could reach equilibrium at levels well below their potential, in part because there might not be sufficient demand–people wouldn’t have the money to buy even if there were many unfulfilled needs and an abundance of products.
Keynes and his followers argued that government could stimulate the economy by borrowing and spending to increase demand for goods and services. That would set off a spiral of growth, which would ultimately increase private production, create jobs, encourage investment, and generate tax revenue. In many cases, Keynes argued, government would also have to make long-range investments that private capitalists were unwilling to undertake.
