NPR's Adam Davidson strikes again

The following is a copy of a letter I am sending to NPR re Adam Davidson, NPR’s "expert" on Keynes. In a breezy conversation two weeks ago today with Morning Edition’s host Renee Montagne, reporter Adam Davidson managed to convey to listeners the notion that President Obama has founded his solution to our current economy crisis on the largely discredited theories of a long dead anti-semitic nutty snob of an Englishman who hated Americans, the French, and the working class: John Maynard Keynes. Google “Keynes: gay brit elitist hater of USA Jews working class” and it will lead you to a posting to the Planet Money Blog by Mr. Davidson dated January 14, 2009 (http://www.npr.org/blogs/money/2009/01/some_problems_with_keynes.html To not put too fine a point on things, taking over twice the listener’s time and with two more weeks to do his homework Mr. Davidson again failed miserably to improve on this grossly inaccurate characterization of someone who the late Milton Friedman –certainly not to be considered by any stretch of the imagination a Keynesian- referred to as a "brilliant scholar" and "one of the great economists of all time." (Milton Friedman, "Keynes's Political Legacy," in John Burton, ed., Keynes's General Theory: Fifty Years On (London: Institute of Economic Affairs, 1986), pp. 47-48, 52)) After Mr. Davidson’s piece ran on Morning Edition I wrote to question the accuracy of much of what Mr. Davidson claimed. I also noted that the sort of follow up that I think represents what we mean by the term “in-depth reporting” (and that NPR prides itself on) was woefully absent in the questions Ms. Montagne’s put to Davidson. I wouldn’t continue to bother with this but it is estimated that there are 20 million people who tune in to NPR each week and, as I mentioned above, I fear what we are to take from Mr. Davidson’s is that President Obama is grasping at straws and potentially leading us to Lord knows where. Anti-semitism: I would encourage Mr. Davidson to have a look at volume two of Skidelsky’s biography of Keynes. Pages 238-239 and 486-489. To focus on Keynes’s anti-semitism is akin to running a piece on Lincoln’s influence on Mr. Obama noting that Lincoln was a racist (Which he was. After several generations of helping build this country, Lincoln nonetheless supported the idea of “repatriating” African Americans once freed from slavery. He wrote to Horace Greely that if he could restore union without emancipating slaves he would gladly do so. And in Sept 1858, in his fourth debate with Douglas, Lincoln said that “there is a physical difference between the white and black races which I believe will forever forbid the two races living together on terms of social and political equality”) Americaphobe and anti-French snob: Perhaps Mr. Davidson would like to consider Keynes’s views on Americans and the French and how they were shaped by his experiences after World War I (see for example Skidelsky, pp 122-123) On the matter of Keynes’s hatred of the working class, I am at a complete loss to see where Mr. Davidson draws the conclusion that Keynes hated them. His mentor Alfred Marshall wrote eloquently of the inequities in English society as being one of the key factors that drew him to economics. And what led Keynes to the General Theory was a flat refusal to accept what was implicit in classical economics of his day and in conservative economics of our own; the notion that widespread unemployment was the fault of recalcitrant workers unwilling to face facts and adjust their pay downwards. Beyond this I would again invite Mr. Davidson to consult Skidelsky (volume 2 p. 526) or, better still, read Keynes’s “Economic Possibilities for our Grandchildren” Keynes’s theories discredited long ago: Since at the very least 1959, with the publication of Debreu’s Theory of Value it has been clear that Smith’s invisible hand is only as swift as we might like it to be if there are complete markets. While the main text is well beyond most mere mortals (economists and noneconomists alike) I would suggest that Mr. Davidson read carefully the first few pages of the introductory chapter to Magill and Quinzii’s Theory of Incomplete Markets (2002) and what they have to say about Keynes. One can easily rally a number of articles and books written in the last generation in which the classical resurgence of the 1970s and 1980s has been called into question. The vast majority of them focus on incompletely-formed or missing markets and the weaker efficiency of market economies when compared to the ideal case . In this growing literature many recognize the parallels of their new models to Keynes’s insights (as is the case in Magill and Quinzii) And the policy implications of this work are clear; between completely free markets and complete control we find reality where ignorance and uncertainty are a fact of life and in which the potential need for government intervention is there. To not risk giving Mr. Davidson too much to absorb I again recommend he have a look at Skildelsky volume two and the quote given on page 409 from one of Keynes’s students, A.F.W. Plumptre ( who studied with Keynes at Cambridge in 1920s.) Plumptre notes that in studying with Keynes it was clear that Keynes’s desire was to protect freedom and prevent communism by introducing government intervention in a timely manner on a sufficiently large enough scale. A much better story for NPR to focus on concerns the price we are paying for too little being done too late. We are constantly being asked to choose between two polar extremes that are of the economic equivalents of completely negligent parenting (laissez faire) and overly strict meddling parenting (socialism). In essence, what Keynes argued for was for political leadership (under the guidance of academics it is true, who else?) to seek out, as best as humanly possible, a point along the continuum between these two extremes in order to protect freedom and fortunes of individuals. As he noted on more than one occasion in any downturn those least able to bear the burden of adjustment are the ones who are expected to do the heavy lifting. (This is another important story that NPR is largely missing in its coverage of the current recession.) Just as good parenting requires intelligence, the exercise of good judgement, and a clear sense of duty to one’s children, good governance requires all these things. The fact that our leaders can fail, as so many of us often do as parents, does not excuse us from trying or give us the right to criticize any one so arrogant as to point out how difficult and important the task is.