David R. Henderson  

My Comments on George Shultz's 95th Birthday

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On December 11, I chaired a panel at the Hoover Institution as part of a day-long celebration of George Shultz's 95th birthday. On the panel I chaired were, in order of speaking, David Davenport of Hoover, Heather MacDonald of the Manhattan Institute, Kiron Skinner of Hoover and Carnegie Mellon, and Condoleezza Rice of Hoover.

Many of the participants in the various panels gave their appreciations of George Shultz and so, in leading off the panel, I decided to do my own short appreciation. Here, to the best of my memory, is what I said.

I want to give a short appreciation of George by talking chronologically about how I heard about him or dealt with him over the years. But first I want to point out, which no one else has yet, how beautiful his socks are. (I had noticed that George, true to form, was wearing colorful socks. George, sitting in the front, obliged by putting his leg up on the desk for all to see.)

I first heard about George in 1973, about a year after I moved to this country to go to graduate school at UCLA. Nixon's price controls were on then and they were causing shortages of gasoline. George, as Secretary of the Treasury, had a press conference at which he announced that, just in case the U.S. government decided to ration gasoline, the government had had ration coupons printed up that would supply about 80% of the number needed. Of course, a reporter asked why just 80%, to which George responded that the government expected that the other 20% would be printed up "in Chicago." People at the time understood that by "Chicago," he meant the Mafia.

(At this point, George spoke up vigorously, pointing out that he had been an opponent of price controls within the Administration. I responded, "I know that, George, I'm just telling a story here." My guess is that printing up ration coupons, and leaving 20% to the Mafia, was his way of cleverly undercutting support for rationing.)

Now follows a paragraph on what I should have said in response to George's comment, but I thought of it only later that day. I should have said this:

That reminds me, George, of a great story our mutual friend Milton Friedman told in his and Rose's autobiography, Two Lucky People. Milton had visited the White House in September 1971, a month after Nixon imposed comprehensive wage and price controls. You were in charge of administering the controls. As Milton got up to leave his meeting with Nixon and you, Nixon volunteered that wage and price controls were a monstrosity and that they would get rid of them as soon as possible, adding, "Don't blame George for this monstrosity." "As I remember it," wrote Milton, "I replied something like, `I don't blame George. I blame you, Mr. President.'"

Now back to my talk.

The next time I remember George is from the summer of 1973, when I was a summer intern at the Council of Economic Advisers under Herb Stein. The senior economist I worked for recommended to Herb that I be made, at age 22, an acting senior economist until his replacement showed up a month later. Herb agreed. So one day I represented the Council at a meeting in the conference room of the Undersecretary of Transportation. I was arguing against a subsidy and getting nowhere, when one of the Undersecretary's aides came into the room and said "Secretary Shultz wants this subsidy out of the bill." The subsidy was eliminated from the bill immediately. I will leave it to you to decide whether that was due to George's influence or mine.

The next time I remember hearing about George was in the winter of 1980 when a friend and I visited Milton in his San Francisco apartment. My friend's goal was to persuade Milton to support a particular president candidate. Milton said no. My friend asked Milton whom he supported, probably expecting the answer "Ronald Reagan." Milton replied "George Shultz."

Finally, a few years ago, George and I worked to put together a volume of speeches and articles his friend the late Walter Wriston. It's titled Bits, Bytes, and Balance Sheets. Around the same time, I had written an article titled "George Shultz's Unconvincing Case for the War on Terror." Shortly after the project had ended, I was in a buffet line ahead of George. I turned to him and said that I thought that project had gone well. George agreed. There was a pause. Then he said, "I've been reading your articles." "Yes," I said, excitedly. "Yes," he said, "and I like some of them."

Before I introduce the panel, I just want to mention that recently Ezekiel Emanuel, a health policy analyst who helped design Obamacare, who is also a brother of Rahm Emanuel, that Chicago mayor noted for his transparency, wrote a piece in which he argued that the optimal age at which to die is about 75. I'm glad that George did not agree with him.

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CATEGORIES: Economic Philosophy

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