Archive for April, 2009|Monthly archive page

Larry Perelman, RIP

I just returned from my father’s funeral. He died at 98.

When I was young, we were not particularly close. He more than encouraged me to become interested in business and to participate at the Temple.  I was totally disinterested in both activities, preferring to play sports. As I grow older, we became closer, even though we lived 3000 miles apart.  As he grew very old we became much closer. Continue reading

A Different Housing Crisis?

Here is a hint of a different dimension of the crisis — not a main cause, but something that could be significant.

When we would drive through West Virginia back in the late 50s & early 60s,  I was struck by the unemployed coal miners sitting on their porches.  Their houses were quite nice, but nobody wanted to buy them because the economy was dead.

Later, my brother moved to Youngstown, Ohio after then steel mills had shut down.  I remember when he called me bemoaning that a tornado missed his home by only a few hundred yards.  At the time, arson was the most important industry in the town.

Theoretically, we might expect that many people would respond to unemployment by searching for better opportunities.  But the steelworkers in Youngstown and the coal miners in West Virginia would take such a large capital loss in selling their homes if they chose to relocate.

Later, I read an article that seemed to validate my intuition. Continue reading

Another Charge of Academic Antisemitism

Be careful, very careful, not to criticize Israel.

Ideological Discrimination in Economics?

Sometime ago I remember reading a study that indicated the way that publications from Chicago trained economists clustered in the Journal of Political Economy and those from Harvard, in the Quarterly Journal of Economics. (Maybe someone recalls the reference.)

I recently came upon an article about the respective hiring patterns of departments of economics, comparative literature, of mathematics.  A similar type of clustering occurs in economics, but far more modestly in mathematics, where presumably ideology would not play much of a role.

Economists commonly describe the ideological clustering is a division between freshwater and saltwater economists — because the conservative departments tend to be in the interior and the more liberal along the East and West coasts.

The author does not attribute the clustering to ideological influences, but one might suspect a reluctance of Chicago to dilute its ideological purity with an excessive influx of people who do Harvard or MIT style economics.  Admittedly, the difference between these schools is much more modest than it has been in the past.

If one can accept the possibility of mutual discrimination on account of relatively modest intellectual differences, might one be forgiven for suspecting the long-denied discrimination against radical economists?

The Economy, or is that Moses’s Shoe?

Hundreds of thousands of economists around the world pore over their subject.  A good number attempt to reduce the economy to scientific laws, which can be expressed as mathematical theorems.  Laws are passed and people are taxed, subsidized or even punished in order to promote the economy.

Just what is this economy?  Before dismissing this question as naïve or impertinent, consider an almost unintelligible sentence from John Selden (1584-1654), a polymath, whom the poet, Milton, described as “the chief of learned men reputed in this land.”  Selden wrote: “We commonly are at What’s the Reason of it? before we are sure of the Thing.”  The two short sentences that follow makes Selden’s meaning clear: “sure of the Thing.  Twas an excellent question of my Lady Connon, when Sir Robert Coggon was magnifying of a shoe, which was Moses’s or Noah’s, and wondering at the strange shape and fashion of it:  But, Mr Cotton, says she, are you shure it is a shoe?” Continue reading

Water and Energy

Finding a solution to the energy problem will not be easy.  Water is an even more challenging problem.  In my Hainan talk, I mentioned the tension between water and power. Here is another article on the subject, noting the tension between water and solar energy.

Beamish, Rita (AP). 2009. “Future Cloudy for Desert Solar Drive.” Sacramento Bee (19 April): p. A 4.

“A westward dash to power electricity-hungry cities by cashing in on the desert’s most abundant resource — sunshine — is clashing with efforts to protect the tiny pupfish and desert tortoise and stinginess over the region’s rarest resource: water. Water is the cooling agent for what traditionally has been the most cost-efficient type of large-scale solar plants. To some solar companies answering Washington’s push for renewable energy on vast government lands, it’s also an environmental thorn. The unusual collision pits natural resources protections against President Barack Obama’s plans to produce more environmentally friendly energy.”

Finance Question

What happened what happened with the debate about whether speculation or market manipulation could affect oil prices? I’m wondering because of the recent discussion about the urgency of preventing shortselling. Why would shortselling in stocks have an effect, but not speculation in oil?

Micromanagement: Medicine and Education

A few months ago, I commented on a New York Times article bemoaning efforts to micromanage medical care — medicine by the numbers:

A few days ago, Wall Street Journal published a similar article, arguing that good medical care requires considerable discretion on the part of doctors and that micromanaging is destructive.

Groopman, Jerome and Pamela Hartzband. 2009. “Why ‘Quality’ Care Is Dangerous: The Growing Number of Rigid Protocols Meant to Guide Doctors Have Perverse Consequences.” Wall Street Journal (8  April): p. A 13.

Yesterday’s New York Times informed its readers that the Obama administration is going to continue the No Child Left Behind nonsense of the Bush administration.

While tens of thousands are getting fired and schools are cutting back vital programs, mandating multiple-choice tests will somehow save public education.  Of course, the schools that cannot afford teachers who have to lay out money for tests and to waste valuable teaching time teaching toward the test.

My own university is asking us to us provide some sort of quantitative measure of our success in educating students. Because we teach a broader mix of subjects, we are not faced a cookie cutter approach as extreme as K-12, education.  The demand is that we devise our own metric.  Are economics students to demonstrate the quality of their education by regurgitating market fundamentalism?

Wouldn’t it be nice if finance and other forms of business were held to strict standards?

AIG Bonus Wrath Recruits Revolutionaries

Financial RevolutionaryThe TalkingPointsMemo has a story about AIG Financial Products head Gerry “Che” Pasciucco and his defense of his company.

But look at his shirt.   Is he ready to take up the pitchfork?

The Green Revolution

U.S. National Public Radio broadcast a story about the failure of the “Green Revolution” in India on this morning. See

Around 1970, I published an article in The New Republic leveling the same criticisms about the Green Revolution that Daniel Zwerdling made in his piece. [I don’t remember what issue it was in. Maybe someone can locate it for me] Some of that material appeared in Farming for Profit in a Hunger World.

Later, in the 1970s, I debated Norman Borlaug, the so-called father of the Green Revolution in Santa Barbara. He did not show, so he participated through some sort of phone line. He is sincere in his belief, but did not seem particularly concerned about the problems that I mentioned, including overreliance on fertilizers, pesticides, groundwater, and credit. Nor was he interested in concerns about water rights being concentrated among large landholders. My speculations about why Rockefeller interests would be so enthusiastic about the Green Revolution were beyond the pale.