Abstract: Irrelevant Genius: Economists and Federal Economic Policymaking in the United States, 1921-1938

Jonathan Stevenson Franklin

Abstract

Although this paper began as an investigation of the business community's influence on federal economic policymaking in the 1920s, it soon evolved into a consideration of professional economists' policymaking power. The press's tendency to describe then Secretary of Commerce Herbert Hoover as an economist, despite his lack of training in the rapidly growing discipline, suggested an interesting relationship between professional economists and politicians. This paper argues that although the business community continued to enjoy nearly exclusive influence on federal economic policymaking from 1921 to 1932, the professionalization of economists created a permanent bridge between economic departments and Washington by 1938. To support this argument, I focus on Hoover's tenure as Secretary of Commerce, as well as his presidency. In particular, I consider his reaction to the 1921 recession and his run-ins with Secretary of Agriculture Henry C. Wallace. I also consider how Franklin D. Roosevelt developed economic policy through consideration of his gold purchasing plan, which was largely run by Secretary of the Treasury Henry Morgenthau, Jr.