Background

Jacoby was born on September 19, 1909, in Dundurn, Canada.

Education

After being educated in local schools and receiving a bachelor's degree from the University of Saskatchewan in 1930, Jacoby enrolled at the University of Chicago, where he received his Ph. D. in economics in 1938.

Career

Jacoby worked as a supervisor in the legal and research department of the Saskatchewan Taxation Commission, and before then had been a supervisor in the legal and research division of the province's Department of Finance. Jacoby became an assistant professor of finance at Chicago in 1938. Two years later he was promoted to associate professor, and in 1942 he became a full professor.

In 1948 he transferred to the University of California at Los Angeles, where he was named the first dean of the Graduate School of Business Administration. Jacoby, who did not write a book until late in his career, had a reputation as a competent but rather colorless political economist who considered tax policy the preferred method of regulating the economy. In the summer of 1953, President Dwight Eisenhower named Jacoby to the three-person Council of Economic Advisers (CEA). He served from September 15, 1953, until February 9, 1955. During Jacoby's tenure Arthur Burns was chairman of the CEA and one of Eisenhower's closest advisers on economic policy. At the CEA, Jacoby generally supported Burns in calling for lower taxes and decreased government spending, a policy criticized by liberals and conservatives alike. Burns and Jacoby argued that through corporate tax cuts, the government could produce the greatest impact with the least intervention in the economy. They won the day when Eisenhower became convinced that without tax cuts, the recession would deepen and Eisenhower, the first Republican president since Herbert Hoover, would further identify the party with hard times. Jacoby later argued that taxes on the wealthy and the poor should be cut, while those on the middle class should be increased. He reasoned that a tax cut for the upper brackets would encourage investment and savings (at the time, marginal tax rates exceeded 90 percent for the very rich), while that for the lower ones would enhance economic equity and stimulate consumption.

After leaving government service in 1955, Jacoby returned to UCLA as dean of the Graduate School of Business. In 1957, Eisenhower named him United States representative to the United Nations Economic and Social Council, and in 1965 he was named to the Agency for International Development, to report on the role of American investment and aid in Taiwan's economic growth. Jacoby's subsequent publications reflected his new interests. Can Prosperity Be Sustained? (1956) reiterated his stance in favor of tax-based direction of the economy. This was followed by European Economics - East and West (1967) and The Progress of People (1969). Other Jacoby publications included The Polluters (1972), Corporate Power and Social Responsibility (1973), Multinational Oil (1974), and Bribery and Extortion in World Business (1977). The wide range of topics covered in these books indicates a broadening of Jacoby's interests. His experiences and analysis fit well into the world in which deflation and inflation, recession and expansion, were alternatives to be diagnosed and for which prescriptions might be offered.

In the wake of the oil shock of 1973, the American economy experienced stagflation, the combination of stagnation of growth and inflation, a phenomenon for which macroeconomists were unprepared. In such an atmosphere tax cuts often brought more inflation, and tax increases often depressed even further an economy on the brink of double-digit unemployment. Nor did Jacoby realize that America's economic hegemony of the post-World War II period had drawn to a close, calling for a new set of policies. He now advocated the establishment of planning commissions to help guide the nation's industries. He welcomed the expansion of multinational corporations as assisting the development of Third World countries and stimulating trade. Jacoby retired as dean in 1968 and became Armand Hammer professor of business economics and policy. He died in Los Angeles, on May 31, 1979.

Achievements

• Jacoby was widely recognized as an expert on matters of taxation, finance, economic policy, and business-government relationships.

Works

More photos

• book

  • CORPORATE POWER AND SOCIAL RESPONSIBILITY (Studies of the Modern Corporation)

    (One of America's most distinguished economists, Neil H. J...)

  • The polluters: industry or government? (IEA Occasional paper, 36)
  • Multinational Oil: A Study in Industrial Dynamics (Studies of the modern corporation)
  • European economics - east and west;: Convergence of five European countries and the United States
  • Can Prosperity Be Sustained

Politics

Because of his views Jacoby was considered by some to be a moderate Keynesian, which was not the case in that he believed government spending increases during recessions, a mainstay of Keynesian thought, have only a small initial effect and take hold only after the recessions end, thus possibly proving inflationary. Furthermore, he generally favored corporate over individual tax cuts, since the former would stimulate investment while the latter might have inflationary consequences. At the time, these stances placed him squarely in the moderate Republican camp.

Membership

Jacoby served as a Chairman of President Nixon's Task Force on Economic Growth and was a member of the Pay Board (1971-1973).

Connections

Jacoby married Claire Gruhn; they had two children.

Spouse:

Claire Gruhn

References

• Biographical Directory of the Council of Economic Advisers