For about 20 years, Ray Keating wrote a weekly column - a short time with the New York City Tribune, more than 11 years with Newsday, another seven years with Long Island Business News, plus another year-and-a-half with RealClearMarkets.com. As an economist, Keating also pens an assortment of analyses each week. With the Keating Files, he decided to expand his efforts with regular commentary touching on a broad range of issues, written by himself and an assortment of talented contributors and columnists. So, here goes...

Saturday, August 29, 2020

“Greyhound” Ranks as Strong Storytelling – Even on a Smaller Screen

by Ray Keating
The Keating Files – August 29, 2020

The film Greyhound – written by and starring Tom Hanks, and directed by Aaron Schneider – ranks as strong storytelling on the big … oh, wait … on your favorite streaming device.


When storytellers manage to convey real suspense and emotion; the significance of the tale (you know, why this matters); character essence (including why we should care); and, especially when dealing with historical events, respect for the material, that is a noteworthy accomplishment. Hanks and his fellow storytellers do exactly this in Greyhound.

This movie tells the story of the Battle of the Atlantic during World War II by focusing on one U.S. destroyer, led by Captain Ernest Krause (Hanks), on a particular crossing of the Atlantic Ocean. The Battle of the Atlantic refers to the convoys of ships carrying supplies and personnel from the United States to Europe in support of the war effort. These convoys were protected by the U.S. Navy, and hunted by Nazis U-boats.

The film is based on the novel The Good Shepherd by C.S. Forester, but stays true to the Battle of the Atlantic. The movie focuses on a two-day portion of a 37-ship convoy’s crossing in February 1942, specifically, the part of the journey in the middle of the Atlantic when convoys were vulnerable due to the lack of air cover. 

This is Krause’s first command and crossing. His ship – the U.S.S. Keeling, nicknamed Greyhound – is the lead destroyer protecting the convoy.

After hearing the words of British Prime Minister Winston Churchill and U.S. President Franklin D. Roosevelt at the very start of the film, the viewer is introduced to Krause as he is kneeling in his cabin. He is saying part of Martin Luther’s morning prayer: “Dear Lord, let your holy angel be with that the evil foe may have no power over me. Amen.” We also see a card hanging on his mirror that says, “Jesus Christ the same yesterday, today, and forever. Hebrews 13:8.” So, along with a few other moments, the filmmakers establish that Krause is a man of faith. This is done ably and not in an overhearing, heavy-handed way; it’s simply part of telling the story of who this man is. (Filmmakers calling themselves “Christian filmmakers” might want to take note.)

As a commander, Krause is put to the test as a “wolf pack” of Nazis U-boat submarines pursue the convoy. Tense, often edge-of-your-seat action is central to this military thriller at sea. Excellent visual effects and the right music convey the hunt going on between Greyhound and the U-boats, and how the roles of the hunter and the hunted shift during battle.

But there’s much more. The viewer sees Hanks in a powerfully unstated performance wrestling with no-win decisions whereby whichever direction the captain chooses, lives will be lost. The weight of command is made clear, including the toll it takes on Captain Krause mentally and physically. At the same time, the viewers see the silent strength and resolve of Hanks’ character.

Greyhound embraces the details of a battle at sea during World War II, but it doesn’t get lost in those details. Instead, a very human story shines through, along with perhaps a newfound respect for those who fought the Battle of the Atlantic.

The film ends (small spoiler alert!) in fitting fashion. Hanks’ character returns to his cabin after being up for more than two days, and with bloody feet. He kneels once again and prays part of Luther’s evening prayer: “I thank you, my heavenly Father, that you have graciously kept me this day. Into your hands I commend myself, my body and soul. Amen.”

Do I have any complaints? Just one. Elizabeth Shue plays Evelyn, the love that Hanks’ character left behind at home. We see her in brief flashbacks that turn out to be far too brief. A bit more on this front would have added to Hanks’ character and the sacrifices made during wartime. Indeed, I had the feeling that more was filmed, but wound up on the cutting room floor.

It also seems necessary to say something about seeing Greyhound via the Apple TV+ streaming service rather than in theaters. Clearly, this movie would have been even more enjoyable on the big screen given its focus on naval warfare. Also, along with Mulan arriving on Disney+ on September 4, Greyhound is an early test case in bypassing theaters for streaming with a major film. Of course, both cases are resulting from the COVID-19 pandemic, but those making and enjoying movies are watching for clues as to where the movie business might be headed. 

Sony had originally scheduled Greyhound to be theatrically released in the U.S. on May 8 and then it was moved to June 12. With the pandemic persisting, it was reported in May that Apple paid Sony $70 million for 15 years of streaming rights for the film, with Sony retaining distribution rights in China. There would be no theatrical release in the U.S. for Greyhound. As for Apple TV+, Greyhound stands out on a service that has, at this point, little else. Indeed, given the very limited menu of original material, Apple TV+ offers every incentive for the movie consumer to sign up for the one-week free trial, enjoy Greyhound, and then cancel the service before being charged. Apple has a great deal of work ahead to present consumers a respectable selection of content.

My final point is a tip of the hat to Tom Hanks for ably taking on some significant and focused historical roles that treat the subject with respect. In addition to this movie, I am reminded of his work with Steven Spielberg in Bridge of Spies (2015).

Check out Greyhound, you will not be disappointed.

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Ray Keating is a columnist, novelist, economist, podcaster and entrepreneur.  You can order his new book Behind Enemy Lines: Conservative Communiques from Left-Wing New York  from Amazon or signed books  at RayKeatingOnline.com. His other recent nonfiction book is Free Trade Rocks! 10 Points on International Trade Everyone Should Know. The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

Keating’s latest novel is  The Traitor: A Pastor Stephen Grant Novel, which is the 12thbook in the series. There is a big sale on signed books and sets at https://raykeatingonline.com/t/book-of-the-month. Also, the best way to fully enjoy Ray Keating’s Pastor Stephen Grant thrillers and mysteries is to join the Pastor Stephen Grant Fellowship! For the BEST VALUE, consider the Book of the Month Club.  Check it all out at https://www.patreon.com/pastorstephengrantfellowship

Also, tune in to Ray Keating’s podcasts – the PRESS CLUB C Podcast  and the Free Enterprise in Three Minutes Podcast  

Check out Ray Keating’s Disney news and entertainment site at  www.DisneyBizJournal.com.

Tuesday, August 18, 2020

PRESS CLUB C Podcast with Ray Keating – Episode #27: Reason over Nonsense on International Trade


Listen to Ray’s conversation with a leading voice in our nation’s debate over trade. Bryan Riley is the Director of NTU’s Free Trade Initiative. He subscribes to sound economics when it comes to trade. That is, he is a rare, welcome voice of reason in a national discussion on trade that too often careens into nonsense. Oh, and is Cheap Trick the greatest band ever? Bryan thinks so. Tune in now!

Monday, August 17, 2020

2020 Politics as the Conventions Get Rolling … Kind of?

by Ray Keating
The Keating Files – August 17, 2020

Remember when political parties mattered? You don’t have to journey that far back in time. Arguably, to just before 2016. 

That was the year when Donald Trump, who spent most of his life outside the Republican Party, seized control of the GOP, and Bernie Sanders, a socialist who was not a Democrat, nearly grabbed control of the Democratic Party. Many would argue that Sanders did gain the socialist hearts of Democrats.


So, maybe it’s fitting that during the COVID-19 pandemic, party conventions in 2020 are virtual affairs, with Republicans celebrating their relatively newfound populist nonsense and Democrats coming to terms with their socialist nonsense.

The Democrats were supposed to meet in Milwaukee, but now they’ll be serving up speeches this week (from August 17 to 20) virtually. As for the Republicans, it has been fittingly confusing. That is, the GOP convention was originally planned for Charlotte, North Carolina. But President Trump moved it to Jacksonville, Florida, when North Carolina’s government officials declined to allow for a large gathering amidst the coronavirus. But then the same thing basically happened in Florida, so Republicans, too, will be partying remotely from August 24 to August 27.

What do the polls look like heading into this virtual convention season?

According to national polls released so far in August, Democrat Joe Biden leads in all of them against Republican Donald Trump, ranging from as few as four percentage points, and therefore within the margin of error, to as many as 11 points. Biden’s numbers come in as low as 44 percent to as high as 54 percent, while Trump ranges from 40 percent to 46 percent.

By the way, it’s worth noting that Biden apparently didn’t receive any boost in national polling after selecting Kamala Harris as his running mate.

But what’s happening in the battleground states? 

Arizona is a toss-up, with three of the latest four polls showing Biden up by 1 to 4 points, and the other poll putting Trump up by a point.

In Florida, polls show Biden holding a consistent, small lead, and coming in with at least 50 percent of those polled.

As for Michigan, Trump consistently trails Biden by anywhere from 4 to 11 percentage points in recent polling. But a key point is that Trump has been unable to push above 43 percent since mid-June.

The trend is more hopeful for the president in Minnesota. He had trailed Biden by large margins, but they have closed, with the latest polls pointing to Biden being up by 3-5 points.

Matters have improved some for Trump in North Carolina as well in the latest polling. The race is effectively tied in the state.

However, Pennsylvania stands out as a huge challenge for President Trump, with Biden leading in every poll and by notable margins.

And the numbers remain positive for Biden in Wisconsin, with the latest surveys basically putting Biden around 50 percent and Trump in the low 40s.

As for other battleground states, we haven’t seen a poll from Ohio since July. The two latest surveys put Biden slightly ahead, but in effect, it looks like a dead heat. 

A poll released early this month put Trump up slightly in Iowa, but again, that state ranks as a dead heat. 

And out of the two August polls from Georgia, one put Trump up narrowly, and the other Biden. The race in Georgia, therefore, rates as a dead heat – and that’s troubling for the president given the state’s normal Republican leanings.

The latest polls we have from New HampshireMaine and Virginia came in late July, and Biden was up big in each state.

Finally, the August polls out so far have Trump ahead in Texas by 6 to 7 points. Polls throughout June and July had the race as an effective dead heat in this very Republican state.

As noted in my last rundown on the White House race, everything narrowly broke Trump’s way in 2016. He took Pennsylvania 48.2 percent to 47.5 percent; Michigan 47.3 percent to 47.0 percent; and Wisconsin 47.2 percent to 46.5 percent. For good measure, Trump won Florida by only 48.6 percent to 47.4 percent. 

If the election were held today, President Trump would likely lose each of these states, with Arizona, Georgia, Iowa, Ohio and North Carolina – each of which he won in 2016 – at risk of going to Biden as well.

Well, will the virtual conventions matter? Probably not much. The only outcome that could matter would be Biden fumbling his speech in some notable way. Barring that, the 2020 conventions promise to matter even less than the typical conventions of recent years. Again, that’s fitting given the state of political parties today.

Meanwhile, the poll number that ranked as most interesting to me came from Gallup on August 14. The pollster asked: “Which best describes your view of Donald Trump and Joe Biden: Both would be a good president, neither would be a good president, only Donald Trump would be a good president (OR) only Joe Biden would be a good president?” 

The pollster reported that 25 percent of Americans answered that neither would be a good president. Gallup asked the same question for the 2004, 2008 and 2012 elections, and this year’s 25 percent was the highest breakdown answering neither.

Go figure. I’m with the 25 percent, by the way.

Oh, and in case you were wondering, 5 percent of those polled said both men would be a good president. Really? Who the heck are those people?

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Ray Keating is a columnist, economist, podcaster and entrepreneur.  You can order his new book Behind Enemy Lines: Conservative Communiques from Left-Wing New York from Amazon or signed books  at RayKeatingOnline.com. His other recent nonfiction book is Free Trade Rocks! 10 Points on International Trade Everyone Should Know. The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

Keating also is a novelist. His latest novel is  The Traitor: A Pastor Stephen Grant Novel, which is the 12th  book in the series. Big sale on signed books and sets at https://raykeatingonline.com/t/book-of-the-month.

Also, tune in to Ray Keating’s podcasts – the PRESS CLUB C Podcast  and the Free Enterprise in Three Minutes Podcast  

Thursday, August 13, 2020

PRESS CLUB C Podcast with Ray Keating – Episode #26: Why Electric Cars Bug Me!


Ray Keating explains why electric cars annoy the economist in him. Can you say “government subsidies and mandates”? Ray argues for private-sector innovation, and for ending government handouts for electric cars, for wind power and for solar power. Let entrepreneurs, businesses, workers and consumers call the shots, and if electric cars then make sense, that’s great. Tune in here!



“Muppets Now” Brings Sadness, “Psych 2” Serves Up Joy

by Ray Keating
Review
The Keating Files - August 13, 2020
Originally published at DisneyBizJournal.com

Like many others during a pandemic and period of economic woes (toss in a looming presidential election), I need a break now and then. While I enjoy all kinds of storytelling, sharp wit and general silliness tends to fit the bill during troubled times. Therefore, I was excited to see that two of my favorite founts of fun – The Muppets and the television show Psych – were returning via the Disney+ and Peacock streaming services, respectively.

While the Psych 2: Lassie Come Home movie provided joy, I came away from the first two episodes of Muppets Now actually kind of sad.


Let’s go to the good news first. Psych, which ran for eight seasons on the USA network (from 2006 to 2014) and followed by Psych: The Movie in December 2017, is a comedy-detective show focused on Shawn Spencer (James Roday Rodriguez), a fake psychic with acute observational skills, and his close friend since childhood, Burton Guster (Dule Hill). Via their “Psych” business, the two work with the Santa Barbara Police Department to solve murders. The humorous, silly, pop-culture-filled (with stuff from the 80s to present day) banter and interplay between Shawn and Gus stand out as the treasure at the center of this show. The two never fail to make me smile and laugh out loud.

But there’s more, including a wonderful cast of supporting characters. They are Detective Juliet O’Hara (Maggie Lawson), Detective Carlton Lassiter (Timothy Omundson), Henry Spencer, Shawn’s dad and a retired cop (Corbin Bernsen), Police Chief Karen Vick (Kirsten Nelson), Woody, the funny and creepy coroner (Kurt Fuller), and Officer Buzz McNab (Sage Brocklebank). 

Psych 2 manages to hit all the right notes, as Shawn, Gus and Company try to help Lassiter and along the way get involved in a case perhaps involving the supernatural. The movie overflows with quips, wordplay and refreshing humor. Plus, at its best, Psych made clear the love and friendships shared by the characters, and that comes through in various touching ways in Psych 2. This is 5-star fun for all.

Now for the bad news. Muppets Now misses nearly every note. 

One of the great things about The Muppets – from their original television show to the various movies, as well as Muppets Vision 3D in Walt Disney World – has been that they accomplished what only a few other vehicles have over the years. That is, something on the surface meant for children manages to also provide humor that clearly flies over the heads of little tots but lands sweetly for adults. In this way, The Muppets stand side by side with such wonders as Looney TunesAnimaniacsPhineas and Ferb, and The Adventures of Rocky and Bullwinkle and Friends.


Alas, though, Muppets Now comes up woefully short – for the young ones and for adults. To me, The Muppets worked thanks to an odd mix inspired by comedy classics, such the Marx Brothers and the Bob Hope and Bing Crosby “Road” movies, brought up to date. And the fact that all of this was being delivered by puppets that many of us have come to know and love as their own characters, simply adds to the zaniness and warmth of The Muppets.

Unfortunately, little of this can be found in Muppets Now. The humor is flat, and sometimes even painful. And the core of the characters has been lost. It’s all rather bewildering as to how this poor rendition of the beloved Muppets came to be. It seems like someone at Disney+ was snoozing during the pitch meeting.

If you want a reminder of just how good The Muppets were and could be, you can, of course, watch the old show and the movies. Interestingly, though, you also can catch an episode from another Disney+ streaming show – Prop Culture (read our review of this excellent show). In the eighth episode, host Dan Lanigan takes us on a hunt for props from The Muppet Movie. Along the way, we get glimpses of just how delightful The Muppets have been – with a few clips from the movie – and can be, as Dan has an amusing chat with Gonzo the Great.

Alas, though, none of that delight can be found in Muppets Now.

By the way, is a Psych 3 movie coming? Some interviews indicate that it just might. For example, Decider.com reported:

“I definitely think that there’s a better chance that we do a third movie than that we don’t,” Roday Rodriguez told Collider in a recent interview. “The reason I say that is because I think our fans are still very much with us.”
Added Hill, “In the midst of all the crazy stuff that goes on in the world, and with all of the drama and pandemics and issues that are out there, as long as we can keep delivering a moment of levity for families, I think there’ll be more stories to tell. When we stop delivering the laughter, that will be time for us to pack it on up.”

Count me in! I want to see more of Shawn, Gus and the rest of the Psych gang. As for more Muppets, my heart says “yes,” but my head tells me that after seeing Muppets Now, Kermit and Company need someone at the helm that actually understands or recalls what The Muppets are about in the end.

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Ray Keating is a columnist, economist, podcaster and entrepreneur.  You can order his new book Behind Enemy Lines: Conservative Communiques from Left-Wing New York  from Amazon or signed books  at RayKeatingOnline.com. His other recent nonfiction book is Free Trade Rocks! 10 Points on International Trade Everyone Should Know. The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

Keating also is a novelist. His latest novel is  The Traitor: A Pastor Stephen Grant Novel, which is the 12th  book in the series. Big sale on signed books and sets at https://raykeatingonline.com/t/book-of-the-month.

Also, tune in to Ray Keating’s podcasts – the PRESS CLUB C Podcast  and the Free Enterprise in Three Minutes Podcast  

Biden Picks Harris: Will It Matter on Election Night?

by Ray Keating
The Keating Files – August 13, 2020

Former Vice President Joe Biden, the Democratic candidate for president, has chosen U.S. Senator Kamala Harris from California as his vice presidential running mate. Will it make a difference on Election Night, November 3? That’s highly unlikely.


Make no mistake, seemingly everyone in and covering politics has been talking about Biden’s choosing Harris. Democrats are largely pleased, and making the case for Harris. Republicans naturally stand in opposition, though their arguments against her are contradictory (for example, is she too tough on crime or too soft?). The media is dedicating all kinds of attention. 

Of course, I get it. This happens whenever VP candidates are announced.

Nonetheless, pointing out that the VP pick ultimately doesn’t matter – or matters very little – isn’t a statement for or against Kamala Harris per se. Vice President Mike Pence doesn’t matter either. It’s just a political fact. Elections are not decided by who is running to be vice president. People vote for, or against, who is running for president. It’s about the top of the ticket.

Research over the years on the impact of vice presidential running mates reveals next to nothing in terms of a clear, substantive impact. Assorted studies indicate that a very small positive effect on voting in the VP candidate’s home state might exist. Well, I don’t think Biden is at risk of losing California.

Some argue that there can be an ideological factor with the number two pick – the idea of balancing the ticket philosophically to gain votes. One can argue that was at least part of the reason for VP picks by Ronald Reagan in 1980, Mike Dukakis in 1988, Bob Dole in 1996, Al Gore in 2000, John McCain in 2008 and Mitt Romney in 2012. Reagan was the only in this group to win, and no one seriously asserts that his running mate, George H.W. Bush, had anything to do with that victory. Besides, this year, it’s hard to see any serious ideological differences between Biden and Harris.

As for picking a woman as the VP candidate, Geraldine Ferraro didn’t help Walter Mondale in 1984, nor did Sarah Palin make a difference for John McCain in 2008.

Two political scientists, Christopher J. Devine and Kyle C. Kopko, assert that the VP choice matters but for a different reason. They say, “Our research shows running mates matter, above all else, by shaping how voters view the presidential candidate who selects them. Running mates indirectly influence voter choice by changing perceptions of the presidential candidate — which, in turn, changes votes.” Well, okay, but that seems a bit amorphous, to say the least. After all, voter perceptions of candidates are influenced by myriad factors.

Would McCain really have been elected if he hadn’t picked Palin, who was perceived as a poor choice (and was), and would Obama truly have suffered by going in a different direction than Biden? No.

Biden made history by picking Harris, who is the first black and Asian candidate on a major party ticket. Putting aside her politics, Harris’s story is compelling. But will it matter in the end as to how this year’s presidential election will turn out? Again, that’s highly – and I mean highly – unlikely.

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Ray Keating is a columnist, economist, podcaster and entrepreneur.  You can order his new book Behind Enemy Lines: Conservative Communiques from Left-Wing New York from Amazon or signed books  at RayKeatingOnline.com. His other recent nonfiction book is Free Trade Rocks! 10 Points on International Trade Everyone Should Know. The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

Keating also is a novelist. His latest novel is  The Traitor: A Pastor Stephen Grant Novel, which is the 12th  book in the series. Big sale on signed books and sets at https://raykeatingonline.com/t/book-of-the-month.

Also, tune in to Ray Keating’s podcasts – the PRESS CLUB C Podcast  and the Free Enterprise in Three Minutes Podcast  

Wednesday, August 12, 2020

PRESS CLUB C Podcast with Ray Keating – Episode #25: Time for Some Swell Nostalgia with Craig Donofrio, Host of the Mid-Modcast Podcast



Craig Donofrio is a cool guy who happens to be a pastor, author, radio personality, podcaster, Mid-Century Modern fanatic, and Tikiphile. Oh, yeah, he also dabbled in rock ‘n’ roll and politics. Ray forgives Craig for the politics stuff. Join their discussion that celebrates nostalgia and the new podcast Craig cohosts called The Mid-Modcast Podcast, which celebrates all things yesteryear from the 1940s up to the early 1970s. This episode is boss, swell and groovy. Tune in here!

Saturday, August 8, 2020

PRESS CLUB C Podcast with Ray Keating – Episode #24: Big Government vs. Big Tech


Guess Who is the Real Problem? – CEOs of top technology companies were recently hauled before Congress, albeit remotely. The purpose? Well, for all of the importance attributed to this hearing, in the end, it was just another excuse for political posturing and grandstanding. Go figure. Tune in here! 

Tuesday, August 4, 2020

Never Waste an Emergency to Expand the Size of Government?

by Ray Keating
The Keating Files – August 4, 2020

It’s hard to find anyone these days not on board with the federal government shoveling big bucks out the door, given that government, reacting to the COVID-19 pandemic, has shut down large swathes of the economy. But that doesn’t mean the consequences of such actions will magically fail to materialize.

Make no mistake, whether or not you’re okay with staggering levels of federal spending, aid and loan programs, the bill will come due. And it will be huge. Actually, we’re already paying through lost output, lost businesses, lost investment, lost entrepreneurship and lost jobs. That’s what happens anytime government sucks massive amounts of resources out of the private sector – whether via taxes or borrowing – and then reallocates those dollars according to politics. Again, whether the current federal spending binge is justified or not, the costs are unavoidable.

Unfortunately, the ills could linger long into the future if politicians do what they usually do after major emergencies.


Consider some key examples from the past century-plus. 

Before World War I, from 1901 to 1916, for example, federal government outlays ran, on average, at just less than 2 percent of the economy. During U.S. participation in World War I and its immediate aftermath, federal outlays jumped to 3.2 percent of the economy in 1917, 16.6 percent in 1918, and 23.4 percent in 1919.

The economic growth – largely driven by major tax relief – and spending restraint that came in the 1920s during the administrations of Presidents Warren G. Harding and Calvin Coolidge, resulted in a reduction of the federal government’s take. Federal government outlays had declined to about 3 percent of the economy in the late 1920s. While that was an impressive reduction in the size of government, federal outlays as a share of the economy still stood at a third higher than prior to World War I.

Government failing to return to its pre-emergency levels would be the rule, rather than the exception, for the coming century.

Consider the Great Depression and World War II. Presidents Herbert Hoover and Franklin D. Roosevelt sought to fight economic woes with more government, that is, with unprecedented levels of taxes, regulation and spending (along with Hoover and Congress’ protectionism on trade). By doing so, these two presidents and Members of Congress created the Great Depression. They all failed to grasp that it was government causing the pain. And then came fighting the scourges of the Nazis and Japanese imperialism.

Consider a couple of moments during and after this period. After the Depression had dragged on for about a decade, federal outlays stood at 10.1 percent of GDP in 1939. That was more than three times the pre-Depression level. 

During World War II, spending naturally skyrocketed, with outlays climbing to a peak of 42.7 percent of GDP in 1944, and then declining to 14 percent at the end of the forties. That 14 percent level was markedly higher than where it was just before the war.

By the end of the Korean War in 1953, outlays once again had climbed, hitting 19.9 percent of GDP. Subsequently, federal spending backed off some, running around 18 percent of the economy at the end of the 1950s and into the mid-1960s. Again, that was down from the Korean War peak, but still notably above the pre-war level.

The Sixties eventually saw the War on Poverty and the Vietnam War. Federal outlays were pushed up to the 19 percent range, and then there was no effort to pare things back. Instead, federal outlays topped 20 percent of GDP, and staying around the 21 percent to 22 percent range (once more, give or take in years here and there) into the mid-1990s.

Economic growth and reductions in defense outlays actually brought federal spending down for a few years, coming in below 18 percent in 2000 and 2001.  That was noteworthy given where spending had been for more than three decades.

After the attacks on 9-11, however, federal outlays again grew as a share of the economy, exceeding 19 percent of GDP.

The 2008-09 mortgage and economic mess saw federal spending spike to 24.4 percent of GDP in 2009. The subsequent, gradual decline brought outlays as a share of GDP down to 20.2 percent in 2018 and 21 percent in 2019. So, outlays persisted above that 20 percent mark – again, federal spending seemed to reach a new, higher level. 

And now we have the enormous increase in federal spending tied to the pandemic. For example, the Congressional Budget Office reported last month that through the first nine months of fiscal year 2020 (covering October 2019 to June 2020), federal outlays increased by breathtaking 49 percent compared to same period last year.

Through the first nine months of FY2020, outlays came in at more than $5 trillion. For all of FY2019, federal outlays registered $4.4 trillion. Considering that further large increases in federal spending no doubt will be registered during the final three months of the 2020 budget year, and given the shrinking of the economy, it’s within reason that federal spending as a share of GDP could top 30 percent this year.

As vaccines and therapeutics make it to the market and the economy starts to seriously recover, what will happen to the size of government in this country? Initially, we can expect spending to fall from unprecedented heights. But where will it settle? 

Do politicians stay true to form, with spending persisting at levels higher than where it was prior to the pandemic? Cynical advocates of big government might ask, “Why waste an emergency by failing to expand the size of government?” If such sentiments prevail, the economy will suffer from slower economic, income and job growth.

Or, will some economic sanity take hold, with government spending retreating to levels perhaps experienced prior to 9-11, and thereby, leaving more resources in the private sector where they will be used more productively, with the economy then growing more robustly? Of course, for such sanity to prevail, it will require that politicians, and many voters, actually learn from history and economics. That sounds like a tall order, but there’s always hope.

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Ray Keating is a columnist, economist, podcaster and entrepreneur.  You can order his new book Behind Enemy Lines: Conservative Communiques from Left-Wing New York from Amazon or signed books  at RayKeatingOnline.com. His other recent nonfiction book is Free Trade Rocks! 10 Points on International Trade Everyone Should Know. The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

Keating also is a novelist. His latest novel is  The Traitor: A Pastor Stephen Grant Novel, which is the 12th  book in the series. The Kindle price has been cut to $2.99 for each book. Big sale on signed books and sets at https://raykeatingonline.com/t/book-of-the-month.

Also, tune in to Ray Keating’s podcasts – the PRESS CLUB C Podcast  and the Free Enterprise in Three Minutes Podcast