THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Monday, November 28, 1994 TAG: 9411240008
SECTION: FRONT PAGE: A9 EDITION: FINAL
TYPE: Editorial
SOURCE: George Hebert
LENGTH: Medium: 54 lines
``The dismal science.''
That's what someone has called the study of economics.
In much the same churlish vein, there is also the allegation that only two experts in the whole world really understand economics - and they disagree.
I was reminded of these observations recently when I was looking up something on an entirely different subject in the 1920 microfilm file of Virginian-Pilot issues.
Just a few days before my research trip to the Kirn Memorial Library, the Federal Reserve Board had raised short-term interest rates (higher than many had expected), in another ratcheting-up designed to curb the building inflationary pressures that the board sees as a serious national threat.
And, predictably, the move was not unanimously welcomed. Some financial experts immediately cried that the restraint on credit was too heavy-handed, would stifle healthy business growth, would cost jobs, would spook investors and depress stock values.
Well, in those 74-year-old papers I was going through, the fight on inflation, by odd chance, was some of the biggest news, too. The villain then was the surge in prices that followed the end of World War I. And recipes for solutions were varied.
There were urgings - pointing to the roots of inflation as too much money bidding for too few goods - that people voluntarily refrain from buying so much. There were accompanying charges that too many citizens were evilly indulging in unnecessary luxuries, fueling the fires.
Gov. Calvin Coolidge of Massachusetts (before he became Silent Cal of the White House) got into the headlines with a formula of ``work and save'' to cure high prices, made high by scarcities and by taxes imposed to pay the cost of the war.
``Wages make no difference if things are not in existence and cannot be bought. So we will have to save our wages. . . . There is not much of anything legal government can do except dispose of unnecessary extensions and unnecessary employees.''
No mention of the role of interest rates.
At any rate, agreement over what to do about explosive economic problems seems to have been elusive down through the years. Remedies abound but don't mesh. Each brings problems of its own.
Economics has, indeed, been pretty dismal for a long time. And, if anything, gets dismaler. MEMO: Mr. Hebert is a former editor of The Ledger-Star.
by CNB