SYLLABUS
History 302: From the Great Depression to the Great Recession
J. L. Larson, Instructor
University 225 494-4127
Introduction and objectives: Economic history looks at the intersections of economic activity, public policy, and the welfare of the people. In this class we are focusing on the American economy from the Great Depression that started in 1929 to the Great Recession of 2008. Our goals are 1) to discover how economists explained the ups and downs of economic performance; 2) how conflicting economic theories influenced policy debates and decisions; and 3) how economic policies and performance both shaped and depended on the state of prosperity (real and perceived) in which people found themselves.
We begin our exploration with Ben Bernanke’s essays on the Great Depression. Bernanke is (until February 1) chairman of the Federal Reserve, and he is recognized as one of the leading authorities on the economy of the Great Depression. We will study his essays to discover, first, what he says about the causes of that protracted depression, and second, how an economist approaches the issues. After Bernanke we will read about two enormously influential theorists whose disagreements shaped economic debates for the rest of the twentieth century: John Maynard Keynes and FriedrichA. Hayek. With these ideological bookends in mind, we then turn to episodes of economic history from the end of World War II to the very recent past. For each of the topics listed below we will read contemporary essays and articles arguing for or against specific policies or evaluating the impact of choices made. These are drawn from periodicals widely read by politicians, businessmen, and ordinary citizens, and as such they reflect the general conversation going on during these decades about how the economy was working and how it might be better managed or directed.
Two patterns will emerge. First, economic arguments tended quickly to invoke the theoretical assumptions of Keynes or Hayek and in the process often dismissed rival voices as simply wrong on the fundamentals. Second, in a participatory democracy such as the United States, ideological purity almost always gives way to practical compromises and short-term benefits, making it virtually impossible to test abstract theories in practice in the real world. We will try to keep track of the two threads of this conversation—but we will find it frustrating!
We will end our exploration by reading about a potential problem very much in the news in 2014: the rising evidence of economic inequality in America. Noble Prize-winning economist Joseph Stiglitz(a liberal) argues that this is a serious problem that endangers fundamental American values—and it can be fixed. Many experts disagree. Our discussion will help set up the debates in our final week of class.
Class Required Readings:
Ben Bernanke, Essays on the Great Depression
Joseph Stiglitz, The Price of Inequality
Additional articles posted on Blackboard.
Exams: There will be two essay exams in class during the semester (50 points each), plus a final exam (50 points) and term project (50 points—see below).
Discussion: Participation in class discussions and evidence of reading preparation will be graded. Showing up gets you 2 points; participation can earn up to 3 for a total of 5 per class or 120 total.
Final Class Project: Students will constitute a Congress that must consider the rising levels of wealth inequality in the United States along with the declining evidence of upward mobility and economic opportunity for the lower classes. You will be assigned the perspective of:
- left-leaning “progressive” Democrats (1/6th)
- centrist “Obama-style” Democrats (1/3rd)
- centrist Republicans claiming to be “fiscal conservatives” (1/3rd)
- Tea Party radicals on the right end of the spectrum (1/6th).
You must study the dominant economic ideas of your assigned group and also consider the constituent pressures that accompany any and all policy initiatives. You also should consider what your types think are “true” ideas about how an economy works. You may try to establish transfer programs or tax schemes that redistribute wealth or encourage public welfare; you may try to craft growth and stimulus policies the better to cultivate or reward a broader middle class (including, for example, health care, education, cheap housing); or you may insist on market-driven outcomes and resist any government intervention to engineer social welfare or wealth distribution. What you MUST do is craft AND PASS some kind of bill addressing the issue or placing it clearly outside the realm of legislative intervention. There are a couple in-class work days set aside to facilitate getting together in teams and making plans, although much work will be done out of class.
On the first debate day “legislators” will introduce bills and debate their merits. On the second debate day you will have to eliminate some ideas and incorporate others into a bill that can secure a majority of votes by the end of the class period. Various techniques of persuasion (short of violence and bribery) may be employed to accomplish this—including the possibility of “horse-trading” to win votes. Our goal is to experience the extraordinary difficulty of separating economic ideas from political influences or of understanding “the economy” as a mechanism separate from political society and its very messy realities. Those on the far right who wish to stay the hand of government will be pushed by others, in the name of consistency, to eliminate popular entitlements for individuals and corporations that already exist. Those on the left who wish to redistribute resources will be pushed, in the name of freedom, to justify their expropriation of private wealth for public benefit. Perhaps we will get lucky and find the terms of an economic consensus in American political culture. Participation = 50 points.
Finally, for the final exam, you individually will answer the question: Can the legislation stand? That is, will it survive constitutional scrutiny by the courts? Will it survive the election cycles in the next 2 and 4 years? Will it have the desired effects in practice? Why or why not?(50 points)
Grades: 320 points possible
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93-100% = A
90-92 = A-
87-89 = B+
83-86 = B
80-82 = B-
77-79 = C+
73-76 = C
70-72 = C-
67-69 = D+
63-66 = D
60-62 = D-
< 60% = F
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Statement on Classroom Civility: Purdue University is committed to fostering diversity and inclusion and welcomes individuals of all ages, religions, sex, sexual orientations, races, nationalities, languages, military experience, disabilities, family statuses, gender identities and expressions, political views, and socioeconomic statuses. Please respect the different experiences, beliefs and values expressed by everyone in this course. Behaviors that threaten, harass, discriminate or that are disrespectful of others will not be tolerated. Inappropriate behaviors will be addressed with disciplinary action, which may include being referred to the Office of the Dean of Students. Please visit Purdue’s Nondiscrimination policy for more information:
Emergency Announcement: In the event of a major campus emergency, course requirements, deadlines and grading percentages are subject to changes that may be necessitated by a revised semester calendar or other circumstances. Here are ways to get information about changes in this course:
email,
my office phone 494.4127,
my cell phone 765.412.9166.
Calendar of Assignments
Jan 14Intro and orientation
Jan 16Bernanke: Essays on the Great Depression, chapters 1-3
Jan 21Bernanke, finish chapters 5-7
Jan 23John Maynard Keynes [read BB folder “Keynes”]
Jan 28Friedrich A. Hayek [read BB folder “Serfdom”]
Jan 30Marshall Plan [read BB folder “Marshall”]
Feb 04Eisenhower and the fiscal/military state [read BB folder “Eisenhower”]
Feb 06work day: Discuss positions in Congress as prep for final project
Feb 11Eisenhower recession 1958 [read BB folder “1958]
Feb 13Kennedy Tax cuts—Keynes or Hayek? [read BB folder “Tax Cuts”]
Feb 18Free Lunch: War on Poverty [read BB folder “Great Society”]
Feb 20No Free Lunch—Friedman and Chicago School [read BB folder “Friedman”]
Feb 25Medicare: economic arguments [read BB folder “Medicare”]
Feb 27Exam #1
Mar 04Nixon and Butz [read BB folder “Nixon”]
Mar 06Global Reach: Economic Impact[read BB folder “War and Peace”]
Mar 11Oil Crisis and stagflation [read BB folder “OPEC”]
Mar 13work day prep for final projects
Mar 17-22 Spring Break
Mar 25DeregulationPanacea [read BB folder “Airlines”]
Mar 27Morning in America [read BB folder “Reaganomics”]
Apr 01Later that morning [read BB folder “Reagan actual”]
Apr 03Retreat from “Voodoo Economics”in 1990s [read BB folder “Voodoo”]
Apr 08Clinton “Prosperity”: Real Thing or Bubble?? [read BB folder “boom time”]
Apr 10Exam #2
Apr 15Economics of the War on Terror [read BB folder “Bush 43”]
Apr 17Great Recession of 2008 [read BB folder “2008”]
Apr 22Stiglitz, Price of Inequality, chapters 1-4
Apr 24finish Stiglitz, chapters 5-10
Apr 29Debate: What to do about inequality?(see Final Project above)
May 01Legislation: Pass a Bill!!!
Final ExamCourt Review: Will the legislation stand
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