I’ve been reading today about the background of Judy Shelton, whom President Trump wants to appoint to the Federal Reserve Board of Governors. Right now I’m leaning somewhat in favor and trying to learn enough to be able to write an article about the potential appointment. I don’t know enough yet.
But I did come across a 1989 Brian Lamb interview of her about her (then) recently published book, The Coming Soviet Crash. I love the poise she has and the way she actually thinks before answering.
Here’s my favorite part so far:
Brian Lamb
Did you change your mind about anything from what you thought the place was going to be like during the time you wrote the book and when you got there?
Judy Shelton
Things were worse that I expected. My study was based on numbers and looking at government figures and statistics. When you see economic problems on paper, it doesn’t hit you as hard as when you go out and see decrepit buildings and lousy roads. Most telling for my husband and I was we had wonderful guides both in Moscow and Leningrad, and the young lady who took care of us in Moscow, she accompanied us to dinner and at the end of the meal sitting on the table was a little stand with some bad peaches. I mean, visibly rotting with holes on them peaches.
And we had had a sumptuous meal and our guide wasn’t interested in having any, but she looked around at the end of the meal taken away the last of the plates and she whispered, “Are you going to eat that fruit?” And we said, “No, no we’re not.” She said, “Would you mind if I had some?” “Of course, help yourself.” And she looked around and she opened her big bag and she dumped it into her bag and the next morning told us her son thanked us, her mother thanked us, her father thanked us, and it was the first fruit they’d had that year and the contrast between the way we were treated.
Actually I think we had luxury accommodations and great meals contrary to what a lot of people have told me their experience has been. And this very telling example from this young lady, who had a pretty good job, made me realize in addition to what I was observing on the streets, the lines in the stores, the general run-down condition of virtually everything had a stronger impact than the numbers ever had.
Indeed!
READER COMMENTS
Alan Goldhammer
Jul 27 2020 at 8:46pm
There is nothing original in her thesis about the state of affairs in Russia at that time. My late friend Murray Feshbach had already done a lot of ground work, looking at demographic, health, and ecological data when he was working at the Foreign Demographic Analysis Division of the US Census Bureau and carried on after his retirement at Georgetown University. There were others who were just as prescient about what was going on including a cousin of mine who was a principal Soviet analyst at the Rand Corporation.
Of course this book does not make up for all the foolish statements she has made over the years about the Federal Reserve and the gold standard. Given the appreciation of gold over the past five months it is probably a good thing we haven’t tied the value of the $$$ to gold.
Kurt Schuler
Jul 29 2020 at 6:05pm
There were writers who had described the problems of the Soviet Union, such as Andrei Amalrik, who in 1970 wrote an essay titled “Will the Soviet Union Survive Until 1984?,” and the aforementioned Murray Feshbach. The mainstream view was however that the Soviet Union was economically viable, even if had not succeeded in approaching the United States in its standard of living. Among prominent economists who voiced this view in the mid and late 1980s were Paul Samuelson in his widely used introductory economics textbook and John Kenneth Galbraith.
A Soviet exile economist named Igor Birman had made the case that the Soviet Union was in financial trouble, in an obscure article called “Secret Incomes of the Soviet State Budget.” Shelton gave him appopriate credit in her book. She put a lot more meat on the bones of his idea and added her own analysis, in particular the implications for Western policy toward the Soviet Union. Her thesis, not at all mainstream in 1989, became mainstream by 1991, and perhaps that is what you are remembering. I followed the debates of the time on the condition of the Soviet Union closely, even to the extent of visiting Lithuania in 1990 and 1991 to make proposals for monetary reform (eventually adopted in 1994). From my perspective, Shelton’s book was bold and original.
Bud Krieger
Jul 30 2020 at 7:42pm
I remember watching 60 Minutes segment in the 1980s about the USSR. The main theme was how inexpensive it was to live there. Someone didn’t see a collapse coming.
Mark Z
Jul 27 2020 at 10:02pm
I think her pre-Trump views on things other than monetary policy are good, but her support for the gold standard is inauspicious (the one gold standard supporter I wouldn’t necessarily mind in the Fed is Larry White because he understands the importance of monetary deregulation for a gold standard to work; I’m not sure Shelton does though; she just seems to have opposed expansion of the money supply in general).
The 180s she did after Trump’s election are also concerning. She has abandoned her inflation hawkishness entirely, which would be a good thing, but it seems to be purely for partisan reasons and I suspect she’ll reverse her position again when someone else is president. She also went from strident free-trader to protectionist after Trump’s election. These changes seem to indicate inconsistency at best, cynical partisanship at worst.
Dr. Phyllis A. Tucker
Jul 28 2020 at 2:51pm
STRONG SUPPORTER since the 1970’s. She is an ORIGINAL, and honest. I am proud to be her HOOVER affiliate.
Roger McKinney
Jul 29 2020 at 2:43pm
I remember watching TV and seeing the long lines to buy bad meat and people papering the inside walls of their apartments with rubles for insulation.
BTW, the Bank of England demonstrated the superiority of the gold standard here: http://www.bankofengland.co.uk/publications/fsr/fs_paper13.pdf
David D Boaz
Aug 6 2020 at 7:30pm
This link doesn’t work.
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