Thank You, Allan Meltzer

Thank You, Allan Meltzer
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I was saddened to hear of the passing last month of Professor Allan Meltzer of Carnegie-Mellon University. Professor Meltzer was a widely respected macroeconomist and advocate for free markets, and his prolific writings spanned academic journals to the popular press. He is perhaps best known for co-chairing the influential Shadow Federal Open Market Committee, which was critical of overly accommodative monetary policies during the 1970s inflationary period. I was teaching monetary theory and macroeconomics at that time, and greatly respected his research. But mainly I will always remember Allan Meltzer as the guy who saved my job.

In 1980, a couple of years out of graduate school, I took my family to Washington, D.C. to what I thought was a safe position as a research economist at the Department of Labor. 18 months later, the election of Ronald Reagan eliminated that job. Fortunately, I landed on my feet as the staff economist for the Senate Finance Committee, then chaired by Bob Dole. Nothing in graduate school or my brief academic career prepared me for that job, but I learned the facts of life on The Hill pretty quickly. For example, Senator Dole would not be interested in reading my five-page, single-spaced memos on current Federal Reserve monetary policy. Two-paragraph summaries of the monthly unemployment report were ok, though.

One of my first duties was to staff the Finance Committee’s hearing on the President’s budget. This hearing would attract a fair amount of TV cameras. President Reagan’s 1982 budget was the first to show a deficit of $100 billion—big money at that time—plus the Finance Committee boasted a lot of high-visibility Senators: Dole, Bradley, Bentson, Danforth, Moynihan, Mitchell, Packwood, Heinz, etc. In addition to preparing Sen. Dole for the Administration witnesses, my job was to fill out the panels of “experts” who would follow after the cameras packed up. These included the usual suspects/advocates for and against tax increases and budget cuts, who were eager for the visibility. But I really enjoyed putting together the panel of top economists. These were people who were leading lights in my profession. If I was calling as the chair of the economics seminar series at West Virginia University, they probably would not have returned my call, but they were more than happy to come on their own nickel to testify before the Senate Finance Committee.

So I put together my panel of famous (to me) economists. I can’t recall the first two, but the third was an older gentleman, well-respected and a former president of the American Economic Association. To my dread, I quickly realized that public speaking was not his forte. His thick Hungarian accent was difficult to understand, but worst of all, he ignored the witness warning lights. Protocol for testifying before Senate committees was clear: don’t read a statement, summarize in three minutes or less, and use conversational, accessible language, leaving plenty of time for the Senators to score points by “asking questions.” This witness ignored all three and proceeded to read an arcane paper, as if at an academic conference. Poor Mr. Dole was the only Senator on the panel, so he couldn’t leave, and he was too polite to turn off the guy’s mike. After what seemed an eternity, the Committee staff director, Bob Lighthizer, walked over to me and asked “Did you invite ******?” Sensing the guillotine, I grimly nodded. “You’re fired!” Well, I thought, might as well enjoy the rest of my last day as Chief Economist for the Senate Finance Committee, so I listened as the hearing concluded with Alan Meltzer’s testimony. In complete contrast, Meltzer announced he’d like to start his testimony with a news bulletin. Sen. Dole, sensing a good story, sat up. “I’ve got good news and bad news,” bellowed Meltzer. “The good news is that a bus load of supply-side economists just went over a cliff. The bad news is that there were two empty seats.” My boss, a political foe of Reagan supply-siders, roared! Meltzer then proceeded to deliver an extemporaneous, charismatic three minute testimony, lucid, hard-hitting and, most importantly, highly supportive of Sen. Dole’s fiscal policy position. Lighthizer walked back to me. “You invited Meltzer?” “Yup,” I smiled. “Ok, you can keep your job.”

Sen. Dole re-told Meltzer’s joke about five times at speeches all over town that day. The next morning The Washington Post, also no fan of Reagan supply-side economics, ran an above-the-fold front page story about Dole’s pirated joke, speculating as to who were supposed to be in the empty seats! (Many guessed Rep. Jack Kemp, a Dole rival who, of course, became his running mate in 1996). Prof. Meltzer not only saved my job, but the positive fallout bought me some early credibility with the Senator and the rest of the staff. I stayed on for three years at the Finance Committee, and even though I’ve been a professor, dean, VPAA and twice a college president, my experience on the Committee continues to be the career experience that stands out. I’m not sure if Bob Lighthizer (recently confirmed as the new U.S. Trade Representative) would have followed through on sacking me, but I’m sure glad Allan Meltzer was there so I didn’t have to find out!

Be at peace, Prof. Meltzer.

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