Marriner Eccles:Architect Of The Great Prosperity 1947-1975

The first chapter of Robert Reich's new book"Aftershock" is titled "Eccles Insight".Marriner Eccles was a Mormon tycoon from Utah who was a director of a railroad,hotel and insurance companies;head of a bank holding company controlling twenty-six banks;and president of lumber,milk,sugar,and construction companies spanning the Rockies to the Sierra Nevada.In the crash of 1929,his businesses were sufficiently diverse and his banks adequately capitalized that he stayed afloat financially.Most economists,leaders of business and Wall St.sought to reassure the country that the market would correct itself automatically and that the governments only responsibility was to balance the budget(sound familiar).Eccles wondered why anyone would invest when the economy was so severely disabled.Investments,according to Eccles,would only take place in a climate of high prosperity,when the purchasing power of the masses increases their demands for a higher standard of living.

Eccles made his national debut before the Senate Finance Committee in Feb 1933,just a few weeks before FDR was sworn in as president.Anticipating what British economist John Maynard Keynes would counsel three years later,Eccles told the senators that the government had to go deeper in debt in order to offset the lack of spending by consumers and businesses(we didn't do enough in 2008).He advised the senators on ways to get more money into the hands of the beleaguered middle class.Eccles connected the dots between how people responded to economic downturn and how his customers reacted to the deep crisis he currently viewed.His proposal included relief for the unemployed,government spending on public works,government refinancing of mortgages,a federal minimum wage,federally supported old-age pensions and higher income taxes and inheritance taxes on the wealthy in order to control capital accumulations and avoid excessive speculation(need most today..conservatives reject all these ideas).Eccles warned that these recommendations should be implemented immediately to restore the economy.

In the first hundred days of FDR's presidency,Eccles proposals were ignored and the president followed the advice of a hodge-podge of ideas cooked up by Wall St. to  keep the economy afloat but nothing else. By mid-December 1933,Roosevelt's Treasury secretary,Henry Morgenthau,asked Eccles to write a report on monetary policy.Morgenthau invited Eccles a few weeks later to join the administration to help alleviate the economic crisis.Eventually,the 1934 budget contained many of Eccles ideas violating FDR's previous promise to balance the budget.According to Eccles,the president swallowed the violation with considerable difficulty.

Eccles knew Wall St. wanted a tight money supply/high interest rates but Main St.of America(real economy) needed a loose money supply and low rates(Wall St.bankers continued this practice in 2008).For the next fourteen years,as governor of the Federal Reserve Board,Eccles continued his vigilance for the welfare of average people and help steer the economy through the remainder of the Depression and WWII.He would also become one of the architects of the Great Prosperity that the nation and much of the world enjoyed after the war.Unfortunately,the likes of Marriner Eccles haven't materialized for the grandchildren of such an insightful businessman.