f_0018622_15948 - The Economic Crisis, E x - P o s t An...

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The Economic Crisis, Ex-Post An Interview with Amity Shlaes The extent to which government should intervene in the market is much more than an academic question. By altering incentives, redistributing wealth, and providig safety nets, the government influences living standards and economic expectations of both businesses and individuals. Since the Great Depression, the precise role that the government should play in regulating the economy and furthering the welfare state has been an issue of contentious debate and intense convictions precisely because it strikes at the heart of what a society’s priorities are and how they should be organized. The current financial crisis has revitalized this debate, recasting it onto a globalized world where different characteristics require a perspective that judiciously incorporates lessons learned from the past with a thorough understanding of the unique features of the present. In this interview, Amity Shlaes achieves this balance, and in so doing, helps us to understand the magnitude of what has happened. Noted author of The Forgotten Man, A New History of the Great Depression, Ms. Shlaes has also written numerous articles and regularly appears on noted programs. In this interview, she stresses that it is the private sector, and, more specifically, individual initiative that is ultimately responsible for producing the current high level of American living standards, and that to place emphasis and hope in the prospect that government can successfully extract the economy from this crisis is misguided. By bringing an intellect that is well-versed in the lessons of history but sharp enough to recogize its limitations in explaining the present and future, Amity Shlaes showcases a viewpoint in this interview that is as informative as it is throught- provoking. The Journal : In The Forgotten Man , you mentioned that in 1936 Roosevelt systematized interest group politics to include a broader range of constituencies, creating the ‘modern entitlement challenge’ that bedevils both Republicans and Democrats. What exactly is the modern entitlement challenge and how is it shaping our government’s response to the current economic crisis? Shlaes: Entitlements are all those things that are owed to people by the government— Social Security, Medicare, Medicaid. Even before we had the crisis these entitlements, which were created either in the New Deal or the 1960’s Great Society, were curtailing our budget options in the US. Every year that you look at a chart of the US budget you’ll see the entitlements growing and the discretionary spending of the government narrowing what lawmakers can do. President Bush pushed education Amity Shlaes is a syndicated columnist for Bloomberg and a senior fellow at the Council of Foreign Relations. She is an expert on the US economy and the Great Depression and has served as a columnist for the Financial Times as well as a member of the editorial board of the Wall Street Journal . 19
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This note was uploaded on 02/01/2012 for the course POLS 351 taught by Professor Shaw during the Fall '08 term at Boise State.

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f_0018622_15948 - The Economic Crisis, E x - P o s t An...

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