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VOLUME XVI, NUMBER 3 Forums: Civil Rights Great Depression Caused and Eminent Domain by Government? he Independent Policy Forum recently held he Great Depression, World War II, and Tprograms on the timely issues of civil rights Tthe Cold War dramatically changed the and eminent domain. American political economy. In his new book, • The American civil rights movement of Depression, War, and Cold War (Oxford Uni- the 1960s was crucial to delegitimize white versity Press, cloth, $35.00), Robert Higgs, supremacy worldwide, but it also instilled in the Independent Institute’s Senior Fellow in white society a sense of guilt that led to the Political Economy and editor of The Indepen- adoption of policies that have unintentionally dent Review, provides a path-breaking reas- hindered the progress of blacks and other mi- sessment of how those seminal events shaped norities, Hoover Institution Research Fellow 20th-century America. Shelby Steele, author of White Guilt, addresses the Independent Policy Forum. Shelby Steele argued at the May 9 Independent Policy Forum, “Is White Guilt Destroying the Promise of Civil Rights?” The passage of the Civil Rights Act of 1964 and the Voting Rights Act of 1965—and the implicit admission by most of white society that (continued on page 3) IN THIS ISSUE: Independent Policy Forums ......................... 1, 6 Great Depression Caused by Government? ... 1 For example, Higgs explains how New President’s Letter .............................................. 2 Deal measures destroyed capital markets and Independent Institute in the News .................. 4 prolonged and deepened the Great Depres- The Independent Review ................................... 5 sion; how a weapons procurement policy in 1940–41 negatively transformed the role of Making Housing Affordable ............................ 6 defense contractors; how and why the U.S. ci- Fellows Honored With Awards ....................... 8 (continued on page 3) 2 The INDEPENDENT EXECUTIVE STAFF DAVID J. TH EROUX, Founder and President MARY L. G. TH EROUX, Vice President MARTIN BUERGER, COO & Vice President ALEXANDER TABARROK, Ph.D., Research Director BRUCE L. BENSON, Ph.D., Senior Fellow IVAN ELAND, Ph.D., Senior Fellow ROBERT HIGGS, Ph.D., Senior Fellow ALVARO VARGAS LLOSA, Senior Fellow RICHARD K. VEDDER, Ph.D., Senior Fellow K. A. BARNES, Controller JOHN CAMPBELL, Development Director CARL P. CLOSE, Academic Affairs Director President’s Letter: PAT ROSE, Public Affairs Director FRED HAMDEN, Sales and Marketing Director Ideas Have Consequences BOARD OF DIRECTORS GILBERT I. COLLINS, Private Equity Manager ROBERT L. ERWIN, Chairman, Large Scale Biology Corporation JAMES D. FAIR, III, Chairman, Algonquin Petroleum Corp. PETER A. HOWLEY, Chairman, Western Ventures his fall during our 20th Anniversary, we W. DIETER TEDE, Owner, Hopper Creek Winery DAVID J. THEROUX, Founder and President, The Independent Institute Tare very pleased to release the seminal new MARY L. G. THEROUX, former Chairman, Garvey International PETER A. THIEL, Managing Member, Clarium Capital Management book, Depression, War, and Cold War, by our SALLY VON BEHREN, Businesswoman Senior Fellow Robert Higgs. The sequel to Dr. BOARD OF ADVISORS HERMAN BELZ Professor of History, University of Maryland Higgs’s pioneering 1987 book, Crisis and Le- THOMAS BORCHERDING Professor of Economics, Claremont Graduate School viathan, which triggered an entire new assess- BOUDEWIJN BOUCKAERT Professor of Law, University of Ghent, Belgium ment of the nature and effects of government JAMES M. BUCHANAN Nobel Laureate in Economic Science, George Mason University ALLAN C. CARLSON power, Depression, War, and Cold War now President, Howard Center for Family, Religion, and Society ROBERT D. COOTER provides an authoritative analysis of harmful Herman F. Selvin Professor of Law, University of California, Berkeley ROBERT W. CRANDALL U.S. government policies since 1930, refuting Senior Fellow, Brookings Institution RICHARD A. EPSTEIN the myths of conventional thinking and rede- James Parker Hall Distinguished Service Professor of Law, University of Chicago A. ERNEST FITZGERALD Author, The High Priests of Waste and The Pentagonists fining and redirecting public debate. B. DELWORTH GARDNER Professor of Economics, Brigham Young University Producing Crisis and Leviathan was no GEORGE GILDER Senior Fellow, Discovery Institute NATHAN GLAZER easy task, because virtually nobody then cared Professor of Education and Sociology, Harvard University WILLIAM M. H. HAMMETT about the book’s thesis. No foundation or Former President, Manhattan Institute RONALD HAMOWY major donors were interested in funding the Emeritus Professor of History, University of Alberta, Canada STEVE H. HANKE book because it did not fit anyone’s political Professor of Applied Economics, Johns Hopkins University RONALD MAX HARTWELL Emeritus Professor of History, Oxford University agenda. At the height of the “Reagan Revolu- JAMES J. HECKMAN Nobel Laureate in Economic Science, University of Chicago tion,” with a perceived, yet fictional, roll-back H. ROBERT HELLER President, International Payments Institute of government spending, I was told repeatedly WENDY KAMINER Contributing Editor, The Atlantic Monthly LAWRENCE A. KUDLOW that no one would care about the book. But Chief Executive Officer, Kudlow & Company JOHN R. MacARTHUR once the book was published, a real revolution Publisher, Harper’s Magazine DEIRDRE N. McCLOSKEY of ideas began. Distinguished Professor of Liberal Arts and Sciences, University of Illinois at Chicago J. HUSTON McCULLOCH The prescient insights of Dr. Higgs have Professor of Economics, Ohio State University FORREST McDONALD Distinguished University Research Professor of History, University of Alabama become all too vivid in the aftermath of 9/11 THOMAS GALE MOORE Senior Fellow, Hoover Institution with the largest expansion of federal power and CHARLES MURRAY Senior Fellow, American Enterprise Institute MICHAEL NOVAK spending since FDR, virtually none of which Jewett Chair in Religion and Public Policy, American Enterprise Institute JUNE E. O’NEILL has anything to do with protecting Americans. Director, Center for the Study of Business and Government, Baruch College CHARLES E. PHELPS So long as the citizenry remains in the dark Provost and Professor of Political Science and Economics, University of Rochester PAUL CRAIG ROBERTS regarding the true nature and effects of this pro- Chairman, Institute of Political Economy NATHAN ROSENBERG Fairleigh S. Dickinson, Jr. Professor of Economics, Stanford University cess, special-interest power-grabbers have the SIMON ROTTENBERG Professor of Economics, University of Massachusetts cover needed to expand government for their PAUL H. RUBIN Professor of Economics and Law, Emory University benefit at the expense of the citizenry. While BRUCE M. RUSSETT Dean Acheson Professor of International Relations, Yale University PASCAL SALIN politics as usual has failed, the illuminating Professor of Economics, University of Paris, France WILLIAM F. SHUGHART II analysis of Dr. Higgs and other Institute fellows Robert M. Hearin Chair and Professor of Economics, University of Mississippi VERNON L. SMITH is providing the necessary insights today toward Nobel Laureate in Economic Science, George Mason University JOEL H. SPRING overturning this abuse of power. Professor of Education, State University of New York, Old Westbury RICHARD L. STROUP Professor of Economics, Montana State University Institute books such as Depression, War, and THOMAS S. SZASZ Emeritus Professor of Psychiatry, State University of New York, Syracuse Cold War (see p. 1), our journal The Indepen- ROBERT D. TOLLISON Robert M. Hearin Chair and Professor of Economics, University of Mississippi ARNOLD S. TREBACH dent Review (see p. 5), events (pp. 1, 6), media Professor of Criminal Justice, American University GORDON TULLOCK projects (p. 4), and other programs are provid- University Professor of Law and Economics, George Mason University GORE VIDAL ing the crucial difference. Your tax-deductible Author, Burr, Lincoln, 1876, The Golden Age, and other books RICHARD E. WAGNER support as an Independent Associate Member Hobart R. Harris Professor of Economics, George Mason University SIR ALAN WALTERS Vice Chairman, AIG Trading Corporation makes this far-reaching work possible, while PAUL H. WEAVER Author, News and the Culture of Lying and The Suicidal Corporation providing you with our new studies plus other WALTER E. WILLIAMS Distinguished Professor of Economics, George Mason University benefits (please see enclosed envelope). We CHARLES WOLFE, Jr. Senior Economist and Fellow, International Economics, RAND Corporation welcome your involvement. THE INDEPENDENT (ISSN 1047-7969): newsletter of The Independent Institute. Copyright ©2006, The In de pend ent In sti tute, 100 Swan Way, Oakland, CA 94621-1428 • 510-632-1366 • Fax: 510-568-6040 • Email: info@independent. org www.independent.org. The INDEPENDENT 3 Independent Policy Forums: Civil Rights and White Guilt • Eminent Domain (continued from page 1) racially discriminatory laws were immoral and to remove every last vestige of racism from unacceptable—was “America’s greatest mo- white society, the bulk of which sees racism as ment” and “one of the greatest moral evolutions disgraceful, said Steele. Rather, the challenge in all of human history,” said Steele, author of is to acquire the education, job skills, values, White Guilt: How Blacks and Whites Together and attitudes most conducive to thriving