Eliot Janeway - Early Career

Early Career

Janeway's writing career began at 24, when he wrote a series of articles for The Nation magazine predicting the 1937-38 recession and proposing a massive program of government investment in transportation and power equipment to cure it. Known as the Roosevelt Recession, with the exception of the Great Depression, it was perhaps the sharpest and deepest economic downturn of the century. The combination of higher reserve requirements imposed by the Federal Reserve Board on the nation's commercial banks and the introduction of the new Social Security tax on employees and employers contributed to the downturn.

Janeway's articles also warned against selling arms to Japan long before the attack on Pearl Harbor and noted that U.S. railroads needed renovation. His articles attracted interest in the Roosevelt administration and brought him some influence within its policy-making councils. Another interested reader was Henry R. Luce, who hired Janeway to write part-time for Time and Fortune magazines. Janeway worked for the magazines until 1944, and then for the next four years directly for Luce, writing a private weekly economic and political advisory letter. In 1948, he quit to write his first book, Struggle for Survival, which was published in 1951.

According to Janeway, Roosevelt followed the war president path of Abraham Lincoln. Janeway believed that both were too practical to try to micro-manage a wartime mobilization, and that both realized that the mobilization could be confused at the top as long as it was overwhelming at the base. As Janeway said, "A victory small enough to be organized is too small to be decisive." Throughout the war, Roosevelt "looked to democracy and not to leaders, to democracy’s reservoir of mass energy and faith and not to the custodians of specialized wisdom."

As Janeway would later say in a 1988 interview: "The Depression transformed economics from a subject of study into an obstacle to be overcome." His Struggle for Survival discussed how World War II and its full employment boom had transformed economics from a dismal science into the means for dynamic possibilities. "I'm the last person who could be accused of practicing economics in any sort of computerized vacuum," he once told an interviewer. "Political economy is not a science, it's a clinical art, like medicine."

In 1955 Janeway started two weekly economic advisory newsletters that formed the heart of the Janeway Publishing and Research Corporation, a business he operated out of his five-story town house on East 80th Street in New York City. In addition to his newsletters, in the 1960s and 1970s Janeway was a syndicated columnist for the Chicago Tribune-New York News syndicate. Janeway scored a number of forecasting firsts, among them higher interest rates that followed the escalation of the Vietnam War. He also became famous in the late 1960s for his dire forecasts of stock market trauma, which earned him the nickname "Calamity Janeway" on Wall Street.

Janeway was an informal adviser to Lyndon B. Johnson during Johnson's career in the United States House of Representatives and Senate. Janeway was among those who urged Johnson to run for the presidency in 1956 and was an active fundraiser for Johnson during the 1960 Democratic presidential primaries. After Johnson became president in November 1963, Janeway disagreed with him on many points of fiscal policy, and broke irrevocably with the president when Johnson escalated the war in Vietnam in 1965. Janeway's book, The Economics of Crisis, resulted from his break with Johnson.

Janeway's analysis and criticism of Johnson's handling of the Vietnam War was economic in nature and affected by Struggle for Survival, his early work on the history of the World War II mobilization. "I was not arguing against the war itself; that is not my field of expertise," he said in an interview. "I said that putting it on the back of the economy without raising taxes and instituting controls would bring on disaster."