1.0Liberty Street Economicshttps://libertystreeteconomics.newyorkfed.orgblog authorhttps://libertystreeteconomics.newyorkfed.org/author/blog-author/rich600338<blockquote class="wp-embedded-content" data-secret="6BJfbfgMdZ"><a href="https://libertystreeteconomics.newyorkfed.org/2011/07/historical-echoes-whats-missing-in-this-1953-portrait-of-the-american-economy/">Historical Echoes: What’s Missing in This 1953 Portrait of the American Economy?</a></blockquote><iframe sandbox="allow-scripts" security="restricted" src="https://libertystreeteconomics.newyorkfed.org/2011/07/historical-echoes-whats-missing-in-this-1953-portrait-of-the-american-economy/embed/#?secret=6BJfbfgMdZ" width="600" height="338" title="“Historical Echoes: What’s Missing in This 1953 Portrait of the American Economy?” — Liberty Street Economics" data-secret="6BJfbfgMdZ" frameborder="0" marginwidth="0" marginheight="0" scrolling="no" class="wp-embedded-content"></iframe><script> /*! This file is auto-generated */ !function(d,l){"use strict";l.querySelector&&d.addEventListener&&"undefined"!=typeof URL&&(d.wp=d.wp||{},d.wp.receiveEmbedMessage||(d.wp.receiveEmbedMessage=function(e){var t=e.data;if((t||t.secret||t.message||t.value)&&!/[^a-zA-Z0-9]/.test(t.secret)){for(var s,r,n,a=l.querySelectorAll('iframe[data-secret="'+t.secret+'"]'),o=l.querySelectorAll('blockquote[data-secret="'+t.secret+'"]'),c=new RegExp("^https?:$","i"),i=0;i<o.length;i++)o[i].style.display="none";for(i=0;i<a.length;i++)s=a[i],e.source===s.contentWindow&&(s.removeAttribute("style"),"height"===t.message?(1e3<(r=parseInt(t.value,10))?r=1e3:~~r<200&&(r=200),s.height=r):"link"===t.message&&(r=new URL(s.getAttribute("src")),n=new URL(t.value),c.test(n.protocol))&&n.host===r.host&&l.activeElement===s&&(d.top.location.href=t.value))}},d.addEventListener("message",d.wp.receiveEmbedMessage,!1),l.addEventListener("DOMContentLoaded",function(){for(var e,t,s=l.querySelectorAll("iframe.wp-embedded-content"),r=0;r<s.length;r++)(t=(e=s[r]).getAttribute("data-secret"))||(t=Math.random().toString(36).substring(2,12),e.src+="#?secret="+t,e.setAttribute("data-secret",t)),e.contentWindow.postMessage({message:"ready",secret:t},"*")},!1)))}(window,document); </script> In its January 1953 issue “The American and His Economy,” Life magazine presents a sidebar entitled “How Future Looks to Five Economists,” in which Paul Samuelson, John Kenneth Galbraith, and other eminent economists discuss the national outlook, given the impending defense cutbacks. Samuelson states, “Congress and the new administration have the power to alleviate any recession that might be brought on by reduced defense and investment expenditures.” The others are also optimistic, citing additional offsetting factors. What’s missing? Except for one oblique reference to “credit easing,” no one mentions the Fed or monetary policy—even though economists knew then that expansionary monetary policy (that is, lowering interest rates) can help offset contractionary fiscal policy (such as government spending cuts).