Allan Stockman dies

I just learned from the Cowen/Tabarrok blog (Marginal Revolution) that Allan Stockman died. I met him several times. He worked on a post-doc at UCLA while I was in grad school there. He then moved on to the University of Rochester where he spent his career. He wrote a principles of economics text, and I participated in a panel that read portions and offered comments on it. He was a first-rate economist, specializing in international finance. An obituary is here.

Health Care as Seen by the CEO of the Cleveland Clinic

The March 1 issue of Fortune has an interview with Delos Cosgrove, CEO of the Cleveland Clinic. The clinic is one of the most highly rated medical facilities in the country, and has the highest acuity patients of any hospital in the country. (That is, they have the sickest group of patients.) Dr. Cosgrove offers some interesting comments on health care costs. Like many others, he focuses attention on behavioral patterns--obesity, smoking, and exercise. He argues that the claim that we the quality of health care in the US is not very high is false. He also notes that health care costs will continue to rise, no matter what happens in Congress regarding health care reform. Why? One reason is we have more elderly and we can do more for the elderly today than in the past. He also notes that suffering has gone down. It is a nice counter to so much of what politicians claim about health care and what can be done.

Europe and the Euro

I don't often agree with Krugman, but when he focuses on international economics, he usually is good. His column in today's NY Times is right on. I would only add that the political elites in Europe who pushed the euro through wanted it to help push more political integration--ultimately a United States of Europe. Hence, Krugman's conclusion along with the supporting statement by Eichengreen are the result of that decision over a decade ago.

Good Column on the National Debt

Greg Mankiw has a good column on the national debt in today's Wall Street Journal Business section.

The Liberal Bias of Professors

An interesting article in the New York Times discusses recent research on the political leanings of professors in American colleges and universities. Not surprisingly, it notes that professors are more liberal than society as a whole. This is old news. The newer approach is the reasons given. Many liberals argue it is because conservatives are stupid and most professors are not stupid. Brad DeLong refers to the Republican Party as the Stupid Party on his blog.

Neil Gross and Ethan Fosse argue that professors are "politically typed" in a way similar to how nurses are "gender typed." The article states:

"Nearly half of the political lopsidedness in academia can be traced to four characteristics that liberals in general, and professors in particular, share: advanced degrees; a nonconservative religious theology (which includes liberal Protestants and Jews, and the nonreligious); an expressed tolerance for controversial ideas; and a disparity between education and income."

Liberals are more attracted to academia. Another argument is that once in place, it is difficult to change things because professors at a university decide who can be hired and tend to hire people like themselves. When I was at LSU in the late 1980s, a professor from the English Department wrote in the student newspaper that he thought it would not be possible for either a Republican or a Christian to become part of the faculty of the department there. (He noted that he was neither but thought the department should be open to people of other views.) It was not true of the Economics Department at LSU since there were a number of Christians and a number of Republicans in the department. (These were separate but overlapping sets.) It is also certainly not true about Christians in the English Department at Hope College since Hope is a Christian college. However, Republicans may be nonexistent there.

In some areas, professors can be very narrow minded. As the blogs of DeLong and Krugman show, liberal professors can also be mean, hateful, and intolerant.

Charles Calomiris offers a spiritual response to the financial crisis

Thanks to my former colleague, Doug McMillin, for the reference to a talk Charles Calomiris gave in March of last year. (The paper can be found here.) He identifies four causal factors to the crisis--factors that have been mentioned in this blog before. He also discusses some ways out. Finally, he looks at examples of people making decisions is crises--including biblical figures Ruth and Job, and historical figures such as Alexander Hamilton, JP Morgan, and Andrew Mellon. All in all, an interesting paper.

Happy New Year

It is now 2010. Is that "twenty-ten" or "two thousand ten"? Who decides? Unlike France, there is not an official organization to keep the purity of the language. Instead, we rely on usage, although the media has a lot to do with what ends up being used. Another way of putting it is that the development of the English language follows an evolutionary process--a process that could be called "spontaneous order." France relies on a government-endorsed process. When I was in Germany on sabbatical, VW ran ads in German magazines that used an English term. (I don't remember the term, unfortunately). When the ads were run in French magazines, the German company could not use the English term in the ads.

We seem to be becoming more like France in our approach to the economy. Johnson Controls will soon be starting a new facility to manufacture batteries for hybrid autos. They are also getting subsidies from the government because the government thinks it knows the technology is promising and should be supported. This government-supported approach sometimes works and sometimes doesn't; although usually follows paths endorsed by politically-important constituencies of the party in power.

It is the increasing reliance of government leadership in the economy that makes me most nervous about the coming year and beyond. Hopefully, I will be wrong and a sustainable recovery will occur.

[I leave tomorrow for Atlanta and the American Economic Association meetings so probably will not post anything new until I return. Again--Happy New Year!]