In Memorium - Obituary

Business Economics, Jan, 2000 by A. Gilbert Heebner

The death of Herbert Stein in Washington on September 8, 1999 at 83 was a great loss to the economics profession and, indeed, to a larger community. "Herb," as he was called by those who knew him, earned distinction in both the public and private sectors as a policy maker, researcher, and writer. His thinking was uncommonly original, broad, and penetrating.

From January 20, 1969 to December 31, 1971, he served as a member of the Council of Economic Advisers (CEA) and continued there as chairman from January 1, 1972 to August 31, 1974 (under Presidents Nixon and Ford). Following his term at the CEA, Mr. Stein was for ten years the A. Willis Robertson Professor of Economics at the University of Virginia. From the late 1970s until his death, he was a senior fellow at the American Enterprise Institute for Public Policy Research in Washington.

Born in Detroit, he received his BA from Williams College and his Ph.D. in economics from the University of Chicago. He came to Washington in 1938 and in the following years worked as an economist for several federal agencies. As a young and relatively unknown economist, he won first prize in a national contest for a plan to maintain high employment after the war. In 1944 and 1945, he served as an ensign in the U.S. Navy. After the war, Mr. Stein became an economist for the Committee for Economic Development (CED), an organization of business executives engaged in research on national economic policy. He was the chief drafter of a CED paper in 1947 on federal budget policy. According to that paper, taxes should be set so as to provide for a small surplus at full employment; otherwise the budget should not be altered in response to short-run changes in the economy. More than fifty years later, it is still invaluable policy advice.

He remained at the CED for twenty-two years, most of that time as Director of Research. During this period he honed his superb skills for communicating on public policy. Accordingly, Herb related well to NABE members--he seemed to speak to us in a special way. He was a member and fellow of NABE, spoke often at our meetings, and gave the first Adam Smith address, titled, "Conservatives, Economists, and Neckties."

Mr. Stein authored numerous books and articles and countless op-ed pieces, invariably carefully thought out and presented with clarity and wit. He was productive to the end. Indeed, his last book, The Illustrated Guide to the American Economy (co-authored with Murray Foss), third edition, was published after his death. What I Think: Essays on Economics, Politics, and Life, published in 1998, provides an excellent insight to the scope of his thinking, which ranged well beyond economics. Many NABE members are likely to be familiar with The Fiscal Revolution in America: Policy in Pursuit of Reality (1996), a second revised edition of the 1969 classic; Presidential Economics (1994), third revised edition; and Governing the $5 Trillion Economy (1989). He was a member of the Board of Contributors of the Wall Street Journal and wrote regularly for the Internet policy magazine, Slate.

Herb was not captive to any particular school of economic thought. His wisdom and intellectual honesty left no room for doctrinaire positions. When a reviewer once called him the master of the "Don't Know" school of economics, he replied, "I don't know if I am the master of it, but I surely avow membership in it more openly than most other economists do." Many of his viewpoints might be generally described as conservative. Unlike some conservatives, however, he often expressed concern for the very poor and a readiness to employ public policy to relieve their condition. As a corollary, he felt that the average worker had fared well in postwar America and was not in need of government help through tax or other policy measures. Herb deeply loved this country, believed that it had advanced socially as well as economically over his lifetime, and remained optimistic that the future will be still better.

Gifted with a matchless sense of humor, he often used it to make a point. Many will remember Stein's law, "If something cannot go on forever, it will stop," a response to those who thought that economic policy should be used to stop an unfavorable trend that they believed could not go on. At times, he simply used his wit to amuse or deflate. Once accused of being waspish with the press, he replied, "I'm not waspish, I'm Jewish." Would that there were an anthology of his humor.

Herb was a kind and caring man, a true friend to many, including those who worked with him in subordinate roles. He was devoted to his late wife, Mildred, to whom he was married almost sixty years, and to his son, Ben, and his daughter, Rachel Epstein. Many of us share their loss.