The last time the economy was in a fix similar to today’s was during the 17-month-long recession of 1981-82. Nationwide unemployment approached 11% (about two points higher than today), and as many as 450,000 jobs were being shed each month.
Annual inflation exceeded double digits then, so the Federal Reserve Bank didn’t dare embark on a rate-cutting strategy for fear of plunging the nation into a hyper-inflationary wasteland like 1920s Germany or present-day Zimbabwe. Instead, they were permitted to hover between 15% and 20%.
Americans read a lot more newspapers back then, and presumably they wished to be well-informed. Having been shellacked by three steep recessions in less than a decade and their purchasing power relentlessly degraded by inflation, many had to wonder what would happen next.
Most of the best-known economic observers of the time graced the pages of the New York Times, and they were often unapologetic about their position in the world. William Safire noted in early 1982 that “if ever there were a good time for hard times, now is that time,” noting that a “ring-a-ding recession” would vanquish inflation. The highest-paid columnist of the era professed sympathy for the unemployed, but didn’t sound too convincing.
Such conflations of authority and a niggling sense of inauthenticity carry over today. Nobel Laureate Paul Krugman’s knowledge about economics is obviously unsurpassed, but he channels it into writing that speaks mostly in generalities and of politics. He can even get petty, as in his nitpicking of Barack Obama’s inaugural address. Thomas L. Friedman is sometimes visionary, but a recent profile in the New Yorker revealed he lives in an 11,000-square-foot mansion on a seven-and-a-half acre lot just outside of Washington, land which he claims he and his wife purchased to rescue from subdivision. Profile author Ian Parker wryly remarked that “could sound like someone buying a lot of champagne to protect society from cork-related injuries.”
Which brings me to Leonard Silk.
Silk wrote “The Economic Scene” column for the New York Times from 1976 until 1992. An economist by training, Silk didn’t enter journalism until his mid-30s and wasn’t hired by the Gray Lady until he was in his 50s. Silk’s writing is a revelation: entirely unadorned yet crammed with hard data and interviews with the nation’s leading economists.
In March1982, Silk embarked on a series of columns about the possibility the country was headed toward depression. He didn’t make any hard or fast judgments; instead he pored over data and worked the phones. His conclusion: depression wasn’t likely, but it could happen. Most occur after periods of flat growth, and the prolonged stagflation of the 1970s might be a case in point.
Silk suggested some contingencies, such as “western governments need to prepare plans for dealing with the threat of failures, bankruptcies and defaults that might otherwise become epidemic.” He also recommended that we develop “industrial programs to foster growth in sectors where the United States has or, can, develop a comparative advantage.”
I could stoop to citing Yogi Berra’s musings on déjà vu, but I’ll pass.
Silk’s son Mark laughed when I read to him a reference his father made to 19th century Swedish economist Knut Wicksell, a name not exactly bandied about by today’s chattering classes. He notes that his father, who passed away in 1995, had developed an abiding fondness for Sweden when he wrote his doctoral thesis on its postwar housing policies.
Mark Silk is himself an academic, a professor of religion and director of the public values program at Trinity College in West Hartford, Conn. But he also spent nearly a decade as a columnist, editorial writer, and reporter for the Atlanta Journal-Constitution. He tried very hard to model his reporting after his father’s. “I think journalism as a whole has become a lot more heavy breathing,” he says, adding that many of today’s financial pundits are more inclined to tell us what they think rather than what they observe.
“My father always believed in a reported column, or at least one where you tried to do some fresh thinking, and maybe some reading of this or that,” Mark Silk says. “It’s not so common anymore.”
Mark Silk thinks it also helped that his father actually came of age in the Great Depression. “When people think about that period, they see the pictures of breadlines and hoboes. At its worst point, 75% of the workforce still had jobs, and they were paying taxes, and society still functioned,” he says. “He had that knowledge and perspective, and brought it to his writing.”
Perspective counted for more back then: when his father was hired by Business Week in the early 1950s, Mark Silk notes it was part of a shift by the editors of the magazine toward a more Keynesian point of view and away from an embrace of wholly unregulated markets. By the time Leonard Silk had begun dissecting the early ‘80s recession, the Reagan Revolution was in full force, and the audience for highly sophisticated financial discourse had apparently begun to wane.
As a result, Mark Silk says “everyone wants answers now, and not what a lot of economists say,” though he adds that the current climate is beginning to temper that. Were his father was writing today, he’d likely be doing what he did best: gathering all the data he could to formulate a cogent viewpoint.
“My father never professed to have the answer, just a fix on all the different perspectives,” Mark Silk says. “His philosophy was, ‘if you stay tuned to my column you might get the answer with time.’”
I certainly wish we could.