The present depression is a direct result of the monetary policy followed by the Eisenhower Administration, J.K. Galbraith, professor of Economics, and Seymour E. Harris '20, Lucius N. Littauer Professor of Political Economy, asserted in a letter released today.
The two Harvard professors expressed their criticisms of the Administration's fiscal policies in a letter addressed to the Chairman of the Council of Economic Advisers, and the Chairman of the Joint Committee on the Economic Report.
List Four Objections
"There has been little modern evidence to support either the effectiveness or the wisdom of the monetary policy," they said. Galbraith and Harris, in their list of four objections to the policy, called it "costly, ineffective, and dangerous," and said that "it discriminates as between the small and weak borrower and the great corporation."
In explaining the dangers of the policy, the two professors stated that "in the last century high interest rates were almost always followed by a lump in business activity." They called for a "strong fiscal policy--one that even accepts the awkward need to increase taxes as a means of countering inflation."