Thoughts and Insights on Economic Issues From 1964-1987

Introduction and Dedication

Table of Contents

David G. Davies
Curriculum Vitae and Bibliography

Memories of
David G. Davies

A Compilation of Quotes From Newspapers Around the Country

All unattributed quotes are from Dr. Davies.
All sources from materials in the Duke University Archives.
Compiled and edited by Amelia Tauchen.

Davies was critical of the growing size of the United States Government and wrote articles and papers attempting to dissuade public opinion at the time that the public sector was 'starving.' This quote, which originally appeared in an article Davies published in Challenge Magazine (Published by New York University), reappeared in both the Wall Street Journal and Reader's Digest in November of 1964.

"The Gross National Product of the United States has increased by approximately 33 times since 1900, and the labor force by a little over 1 ½ times. During the same period federal government expenditures have jumped by 234 times and [federal] employment by 9 times!"

In an April 7, 1965 column by Henry J. Taylor appearing in both The Sun and The Washington Daily News, Davies views on the expanding size of the payroll of the United States Government were echoed:

"Duke University Professor David G. Davies, in turn, finds that since 1960 the rate of growth in government employees has been about five times as rapid as the rest of the labor force." -Henry J. Taylor

In 1972, numerous newspaper articles detailed Dr. Davies research and criticisms on revenue sharing, a proposal to introduce millions of dollars into local and state government's economies. Davies believed that there were many advantages to this program, however regulation and controls needed to be placed to ensure proper use of funds. The June 26, 1972 edition of The Sun included an article, Revenue Sharing Issue Raises Key Questions, which summarized many of Dr. Davies' key points.

"The most important questions to be answered are: Where will the money come from, and what kind of controls will the central government have to exercise proper spending of the money?"

"There might be some questions about local politicians driving around in Cadillacs instead of the Fords they had been driving, as close checks are not kept"

"As economists, we can often deal with things on a 'micro' level while we don't know enough yet to deal with things on a 'macro' level."

In November 1973, a Duke University News Service interview of Dr. Davies and Dr. Neil DeMarchi, A look at inflation and Nixon economics, was published in The Courier-Times of Roxboro, N.C. During this interview, the two economists noted that certain price control measures of Nixon would not work in the long-run and that quotas and tariffs were making it difficult to stabilize the U.S. economy.

"We ought to be chary of how we measure prices when we impose controls on the economy. People aren't stupid. Businessmen react to price controls in different ways. They may change the quality or quantity of a product- less candy in the wrapper. Services may decline. Credit arrangements may change. All these things aren't reflected in the Consumer Price Index, but should be."

In this interview, Dr. Davies proposed some ways of stabilizing the fluctuating US economy:

"We should try to erase some of the rigidities that have crept into it. Oil import quotas, tariffs, minimum wage laws, and the welfare mess are good illustrations. Each time the federal minimum wage law has been increased over the last 20 years, unemployment among blacks and teenagers has risen appreciably. The current welfare structure penalizes the recipient by reducing a person's welfare payment a dollar for each dollar earned on the job. This part of the welfare law seems to assume that an individual has no costs of transportation, childcare and clothing associated with holding a job. Unless one is able to jump from welfare to making a relatively large income, it actually pays to remain on welfare. Finally, the government could permit a steadier growth in the money supply and control its spending. "

In the late 1980s, Dr. Davies began to criticize the Social Security Administration, saying that young people were paying very high taxes to support the aging population. Davies said that the combination of Congress' inability to decide whether Social Security was a welfare program or retirement program and the nation's fluctuating post-Vietnam economy has made the Social Security program "overly sensitive to general economic behavior." The February 5, 1987 edition of The Durham Morning Herald outlined Dr. Davies' viewpoints.

"It is fair to say the system is in near-term and long-term economic jeopardy"

"The benefits legislated by politicians exceed the taxes paid by individuals...Today's retirees will receive several times more in retirement checks than they paid in taxes."