Out of the destruction of the Post-World War economies, began the rise of the economists. Beginning in the United States, then going global, economists created new ideas about deficits, monetary and fiscal policy, that slowly gained traction. By the late 20th century, the influence of economists impacted every corner of the modern world, including trade, government spending, and deregulation. Soon after, the concept of government fell into disrepute, giving rise to nearly unlimited modern corporate power.
So says Binyamin Appelbaum, in his new book The Economists’ Hour: False Prophets, Free Markets, and the Fracture of Society. Appelbaum is the lead business and economics writer for the New York Times’ Editorial Board. He was part of a team at the Charlotte Observer in 2007 discussing the high rate of housing foreclosures and questionable sales practices during the subprime mortgage crisis that won a Gerald Loeb award, a George Polk Award, and was a finalist for the 2008 Pulitzer Prize in public service.
In this week’s Masters in Business interview, we have a wide-ranging discussion on how economists took over policy making In the mid 20th century. Appelbaum has been covering the Federal Reserve since before the Great Recession. We discuss how financial deregulation and groupthink at the Fed helped to create the Financial Crisis in 2008-09. He explains how economist Milton Friedman had a greater influence on 20th century American life than any economist of his generation
His favorite books are here; A transcript of our conversation is available here.
You can stream/download the full conversation, including the podcast extras on Apple iTunes, Overcast, Spotify, Google Podcasts, Bloomberg, and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here.
Next week, we speak with Fran Kinniry, principal in Investment Strategy Group, and Global Head of Portfolio Construction at Vanguard.