Happy 99th Milton

A fine birthday tribute, with video, for Milton Friedman, courtesy of reason.

I particularly like the emphasis on the process - of following arguments wherever they lead and of speaking truth to power and taking on conventional "wisdom" - that Friedman did such a fine job of demonstrating.

Bob Fogel on life expectancy and health policy

Chicago Booth School economic historian Bob Fogel writes on how to think about longevity, his thoughts on likely health breakthroughs in the near future and on how to think about health expenditures and health policy. There is wisdom throughout.

I took Bob's class on "business ethics in historical perspective" when I was in graduate school and thoroughly enjoyed it. Despite the title, what it really was about was the general history of ethical movements in the US. That subject matter formed a natural outgrowth of Bob's famous research on slavery and the civil war. I read his second civil war book, Without Consent or Contract, late in graduate school. It changed my views in many ways and also sharpened my sense of the valuable toolkit that economic historians bring to the economics discipline as a whole.

Finding people from the past

There was a fellow in my entering class at Chicago called Derek Scissors who left the program after a year to get a doctorate in political science at Stanford. Perhaps because his name is easy to remember, it has stuck with me all these years and I have always wondered where he ended up.

The other day while surfing around I saw a mention of a Derek Scissors and decided to track him down. It turns out he is now at the Heritage Foundation in their Asian Studies Center. The Heritage folks should get Derek to sit down for another picture and make him smile for it.

Now ... all I have to do is figure out whatever happened to Claire Marie Hintz, who also started the Chicago doctoral program with me but never finished.

Cochrane on Krugman

Not sure why I did not run across this before, but it is still appropriate in any case. John Cochrane, who taught (really well) my first graduate macro class at Chicago, responds to Paul Krugman's attack on neoclassical economics.

Ouch!

Interviews with Heckman graduate students

On pages 10-11 of the Spring-Summer 2011 issue of Dialogo, the magazine (on line but for one print issue per year) that the Division of the Social Sciences at Chicago produces for its alumni, you can find interviews with three Heckman students.

I don't know how the particular students interviewed for the piece were selected but they do a good job of giving a sense of the intensity of the enterprise.

Hat tip to Nina Herbst at Chicago for putting this on line so that I could blog about it.

Pricing at Harold's

It makes me happy that Steve Levitt still goes to Harold's Chicken Shack despite being a bazillionaire. While I spend my time waiting at Harold's keeping a close eye on my property, Steve spends his time trying to sort out the pricing scheme. Presumably a follow-up post will attempt to explain why the workers at Harold's are so damn slow. But the chicken ... let's just say I arrange my travel plans specially to make sure I get to Harold's whenever I am in Hyde Park.

Lascivious memories from U of Chicago

From the U of Chicago alumni magazine letters section:

Lascivious memories, please

Kristen Schilt, an assistant professor in the Department of Sociology, and I, a graduate student, are seeking alumni who attended or chose not to attend the Lascivious Costume Ball between 1969 and 1984 to participate in interviews about their experiences.

The interview will cover your experiences with the Lascivious Costume Ball, including your reasons for attending or not attending. Additionally, you will be asked to reflect on what the event meant to you, what the event was like, the role you feel it played (or didn’t) in the College community, and your opinions on public perceptions of the event. You must be an alumna/alumnus of the University of Chicago, and you must be familiar with the Lascivious Costume Ball as it was between 1969 and 1984 to participate in the study. For further information, please contact Celene Reynolds at celene.reynolds [at] gmail.com [...].

Celene Reynolds

Chicago

Some thoughts:

1. I'm still bummed that the LCB died the year before I arrived at Chicago.

2. This research sounds like fun. Might yield NIH funding too if the health aspects were appropriately highlighted in the proposal.

3. The late, great Mike Royko's column upon the cancelling of the LCB in 1984.

4. And even a picture, of sorts, with a poem.

Steve Stigler on robustness

A fine, short meditation on the history of robustness in statistics, motivated by recent work in economics.

Steve Stigler is the son of Nobel economist George Stigler, whose courses I took (and graded for) when I was a gradual student at Chicago. Steve shares his father's writing skills and his interest in intellectual history.

I took (well, audited) Steve's course on (surprise!) robust estimation shortly after I started working with Jim Heckman. It was in that course that I met statistics gradual student Nancy Clements, who ended up, at my instigation, becoming an RA for Heckman and a co-author on the 1997 Review of Economic Studies paper on heterogeneous treatment effects.

A couple of years after auditing his class, I read Steve Stigler's excellent book on The History of Statistics, which I continue to recommend to students at the start of every new econometrics course, whether graduate or undergraduate, that I teach. The book influenced the way I motivate least squares regression, which he frames in the book as a solution to the historical problem of what to do when you want to estimate a line but have more than the two data points required for identification.

Joining the "Booth Nation"

An interesting piece on how admissions works for the MBA program at the Booth School at U of Chicago.

I like the bit about having the applicants come up with a four page powerpoint presentation with no guidance. Here is what the article has to say:

It was Ahlm who had the idea for this portion of the application. He jokingly says it came to him when he hit his head on the bathroom sink in his home. “This is an exercise that very much captures the essence of what Booth is about,” he says. “Having an ambiguous problem with many moving parts and being able to come up with a strong compelling solution. It was designed to allow someone to bring an application to life. The Powerpoint adds a lot of color, texture and depth to the application.

It also apparently turns some applicants off. “It leads some people to not hit send, which is a perfect outcome,” believes Kole. “Because if they are frustrated and feel they don’t know what to do with those four sheets of paper, they are not going to do well here. If that’s too much ambiguity for them, it’s good that they find that out before they apply. A lot of admits say they fell in love with the place through that process.”

I do wonder, as always, about whether all this effort would pass a cost-benefit test relative to a much less intensive, and extensive process, that used a few simple rules to mechanically rule most applicants in or out, and then had some human intervention only for marginal cases. I have never seen any evidence one way or the other, and I expect that the admissions experts, like most experts, think that they add more to the process than they do.

Oh, and associate dean Stacey Kole overlapped with me in the economics doctoral program at Chicago. I wondered where she ended up - not too far away it seems.

In praise of Gary Becker

A nice puff piece from the University of Chicago on Gary Becker.

I think this bit sums it up:

In fact, Levitt came to Chicago, in part, to “know the enemy for a year or two.” Instead, Becker completely won over Levitt. “What Gary Becker has done over the last 50 years is fundamentally change how economists think about their profession. He did that by broadening the scope for what economists think is economics. He showed that every topic under the sun is ripe for economic study,” Levitt says.

I am not sure about the bit that claims that Kevin Murphy is an "up and coming" scholar. I think he has pretty much arrived.

I actually started working on a dissertation on the effects of AFDC on children under Becker while Heckman was away at Yale. Becker was kind enough to encourage me to work with Heckman when the opportunity arose, saying that he thought it would be good for me but suggesting that the topic I was working on with him was more interesting than the topics I would be working on with Heckman.

Interview with Gary Becker

A fine interview with Gary Becker. I agree with his cautious optimism.

The ending bits:

My last question involves a little story. Not long before Milton Friedman's death in 2006, I tell Mr. Becker, I had a conversation with Friedman. He had just reviewed the growth of spending that was then taking place under the Bush administration, and he was not happy. After a pause during the Reagan years, Friedman had explained, government spending had once again begun to rise. "The challenge for my generation," Friedman had told me, "was to provide an intellectual defense of liberty." Then Friedman had looked at me. "The challenge for your generation is to keep it."

What was the prospect, I asked Mr. Becker, that this generation would indeed keep its liberty? "It could go either way," he replies. "Milton was right about that."

Mr. Becker recites some figures. For years, federal spending remained level at about 20% of GDP. Now federal spending has risen to 25% of GDP. On current projections, federal spending would soon rise to 28%. "That concerns me," Mr. Becker says. "It concerns me a great deal.

"But when Milton was starting out," he continues, "people really believed a state-run economy was the most efficient way of promoting growth. Today nobody believes that, except maybe in North Korea. You go to China, India, Brazil, Argentina, Mexico, even Western Europe. Most of the economists under 50 have a free-market orientation. Now, there are differences of emphasis and opinion among them. But they're oriented toward the markets. That's a very, very important intellectual victory. Will this victory have an effect on policy? Yes. It already has. And in years to come, I believe it will have an even greater impact."

The sky outside his window has begun to darken. Mr. Becker stands, places some papers into his briefcase, then puts on a tweed jacket and cap. "When I think of my children and grandchildren," he says, "yes, they'll have to fight. Liberty can't be had on the cheap. But it's not a hopeless fight. It's not a hopeless fight by any means. I remain basically an optimist."

Hat tip: marginal revolution

Chicago daze

Chicago economics first year graduate student Evan Miller idolizes Kevin Murphy and makes fun of the stimulus bill.

Kevin is indeed wicked smart, but he is one among several at Chicago who spend their time out in the far tail of the ability distribution. And there is something about this sort of adulatory praise that seems not quite in the spirit of Chicago.

Hat tip: Lones Smith

GSB sells itself at last

I really thought that GSB, the Graduate School of Business at Chicago, would never sell its naming rights. But it has, to someone called Booth, for $300 million.

An hedonic analysis of how much it costs to buy a business school name would make a nice undergraduate paper.

U of Chicago Law School Remodel

I'm glad that U of Chicago decided to remodel the gorgeous law school building by Eero Saarinen rather than tearing it down, as they did with his Woodward Court dormitory. The latter was demolished in 2002 to make room for the new Graduate School of Business, which was designed by the staff architects at Hilton Hotels. Just kidding.

Hat tip: alumni email from U of Chicago

My man Kermit

My friend Kermit Daniel has just been appointed Vice President for Financial Strategy, Budget at the University of Chicago. Kermit and I were in the same entering Ph.D. class in economics at Chicago and wrote some papers together on college quality back in Kermit's academic days.

Hard to believe that we used to sit at Jimmy's talking about the economics of zombies.

John Cochrane and the Milton Friedman Institute

John Cochrane, now a professor at the Chicago GSB, has this tart retort to the letter produced by the Chicago faculty who dissented on the MFI. It is good stuff; I laughed out loud more than once.

Before moving to the GSB John was in the economics department. He taught my first quarter of graduate macroeconomics in what was also his first quarter as a professor. He was one of the two best teachers I had in my first year at Chicago even then, and I am sure that he has gotten better with experience.

On the first day of class John explained to us that he would (and I paraphrase) "spend the first half of the lecture going through the Keynesian model, and the second half making fun of it." That was indeed what happened, and that was indeed all we saw of it in that class.

Also among the students in that class was Beth Fama, daughter of Gene Fama and now John's wife. There was a skit at some point that poked fun at John for hanging out with the "Fama's daughter".

John came through Michigan to give a seminar last year. It was good to see him again; I suspect it was the first time in nearly 15 (!) years.

Hat tip: marginal revolution

Uh oh ....

Someone other than my friends actually reads this blog!

I am quoted in the Chronicle of Higher Education here in a summary of views from the blogosphere regarding the controversy over the new Milton Friedman Institute at Chicago.

Better watch what I type.

Hat tip: Peter Mueser

Chicago

The economist offers their business travel advice here.

I would add the following:

1. Chicago is an international city in the literal sense that it has a lot of immigrants and a busy airport with direct flights to many cities outside the US. A better model, though, might be that it is a very, very large midwestern town. It is in many ways more narrow minded than, say, Ann Arbor or Madison, despite the size difference.

2. When I was there in graduate school it always seemed to me that Chicago had an amazing number of people who viewed the world as a zero sum game, so that the only way they could get ahead was by taking advantage of you. In this sense, Chicago is the opposite of LA, which I think of as the city of the positive-sum deal.

3. I always thought of Chicago as a lazy city rather than a hard-working one but that may be due to interacting more with government workers than with corporate types downtown. Chicagoans pay for a lot more city and county government than they actually receive. It seemed like every year one of the local TV states would do an expose on some sort of city worker where they would tail them on their daily rounds and find them spending a good chunk of the day sleeping in their city vehicle on some quiet sidestreet.

4. The woman who cut my hair at "Hair Ph.D." in Hyde Park used to return to her old neighborhood in the city to vote for Daley, even though she no longer lived there (or, indeed, anywhere within the city limits).

5. The two things I came to like about Chicago were the amazing amount of high quality, low price ethnic dining, much of it in neighborhoods scattered around the city rather than downtown, and the terrific theater scene. In regard to theater, my experience was that quality was more or less unrelated to price. The best piece of theater I ever saw cost five dollars, took place in an old warehouse, and my friend and I were the entirety of the audience.

The poem about Chicago I wrote my first year of graduate school is here.

Milton Friedman Institute

Economic Principals reports on faculty opposition at Chicago to the planned Milton Friedman Institute. The fraction of the faculty at issue is small and will be easily over-ridden by the administration so there is little to worry about.

I thought two issues were noteworthy. First, the opposition protest seems to embody the view that universities should not specialize in particular worldviews. This seems to me rather obviously a bad idea. Particularly in the case of private universities, individuals are, one might say, free to choose what type of school they want to attend and, indeed, whether or not they want to work at a particular type of school. Surely a diversity of schools better serves a diverse student population (and less diverse faculty population) than does a long list of academic clones.

Second, EP remarks that he cannot imagine a Keynes Institute at Harvard. I found this puzzling. First, Harvard is not unwilling to name things after politically controversial characters. For example, its policy school is named after John F. Kennedy, hardly a neutral or non-partisan figure. Second, why is the comparison appropriate when Keynes was not involved with Harvard in the way in which Friedman was at Chicago? It is easy to imagine Harvard setting up a Galbraith center, which seems the more direct analog.

Finally, at least when I was at Chicago, the claim was that no one at the Chicago Theological Seminary actually believed in God. Thus, whatever is being relegated to the edge of campus when it moves, it is not religion. :)

Addendum: A modestly revised version of the original EP post now appears in EP's archive here.