The economists' hour False prophets, free markets, and the fracture of society

New York Times correspondent Appelbaum, who won a George Polk Award for his subprime lending reporting, intelligently chronicles the unprecedented influence of economists on public policy during what he dubs "the economists' hour," roughly from 1969 to 2008. He recounts how economists in the U.S. rose from laboring in obscurity in Quonset huts on the National Mall to occupying such lofty roles as secretary of the treasury and chair of the Federal Reserve. Appelbaum is sharply skeptical of the reputed alchemical powers of economists to engineer prosperity, particularly those (Milton Friedman, Alan Greenspan) whose blind adherence to free market principles, he argues, fostered the Great Recession and significant income inequality. He notes that countries that consulted economic theory, but then accorded management of the economy to engineers (as in Taiwan) or the state (as with China) have performed better economically than the U.S. with its policy of minimal government intervention in markets. He also examines the deleterious effects of the unfettered free market philosophy upon health and safety regulations, regulation of industries, and antitrust litigation, concluding that blind reliance on free markets has led to an ossifying plutocratic minority. This thoroughly researched, comprehensive, and critical account of the economic philosophies that have reigned for the past half century powerfully indicts them. (Sept.)

New York Times journalist Appelbaum has written a thoughtful history of the role of economists in U.S. government and public policy debates. He argues that this influence has become much more important from the second half of the last century up to the present day, and maintains that the differences between liberal and conservative economists is often overstated; economists have tended to be supportive of consumption over production, free trade, free capital flows across countries, floating exchange rates, deregulation, and the concentration of industries into a relatively few major corporations. Appelbaum is open about his support of a regulated market economy with a strong safety net, but he is far from being simplistically ideological. For example, he believes the decline of U.S. manufacturing was inevitable owing to automation but also suggests it could have been allowed to proceed more slowly, giving time for individuals and the country itself to adjust. A minor flaw in the overall work is that early discussions of military conscription are not well integrated with the rest of the book. VERDICT This work offers an intelligent assessment of free-market thought in modern times and the resultant policies and should prove of interest to those interested in public policy.--Shmuel Ben-Gad, Gelman Lib., George Washington Univ., Washington, DC

New York Times editorial page writer Appelbaum recounts the hijacking of economic and public policy by right-wing adherents of the unfettered market.The hour of which the author writes is going on five decades now. The influence of economists on government has grown exponentially since the Nixon administration, with economists convincing the president to scrap the military draft and the judiciary to shelve antitrust cases, their numbers in the federal employ tripling from the 1950s to the 1970s. Economists have taken larger roles in formulating every aspect of public policyand, in time, leaving their disciplinary bounds to issue pronouncements on matters societal and moral. Economists tend to be conservative, and truly conservative economists would in time, for example, come to blame inflation for the decline of the Protestant work ethic and a rise in corruption, fraud, and "a generalized erosion in public and private manners." At the same time, government was generally taking Milton Friedman's laissez-faire, free-market approach to problems rather than the Keynesian quantitative easement of old. As Appelbaum notes, one reason China has been successful compared to the austerity economies of the West is that Keynes has not been forgotten there. Writing in accessible language of thorny fiscal matters, the author ventures into oddly fascinating corners of recent economic history. For instance, a modern trope holds that actor Jayne Mansfield's beheading in an automobile accident prompted changes in truck design (yet mass shootings have produced no comparable gun control legislation), but that turns out to be wrong: The actuarial minds of the late Nixon era put the value of a human (American, anyway) life at $200,000, did the math, and concluded that the proposed addition of safety bars "would need to save four times as many lives to justify the cost." The larger point is that the government's blind trust in the market is now the status quo, and "reliance on the market grants priority to people who have money."Anyone who wonders why government officials still take the Laffer curve seriously need go no further than this lucid book. Copyright Kirkus Reviews, used with permission.