Alternate Economic Histories: The Great Inflation

I may have mentioned this elsewhere, but one of the things that really got me interested in economics was that I was unemployed for two years after the crisis. I had somehow lost two jobs in 2008 and I did not have a local network so no matter where I applied or what I did it felt like everything was going right in the trash. It was incredible disheartening. One that that was my savior was knowing that other people were in the same boat as I was. I waited for the data releases and their analysis by economists and journalists in the popular press to show that yes unemployment is drifting down, but it still is persistent with the “long term unemployed”. 

One of the things that was going around during that time was a chart of the changes in wages over time. It was a histogram of the percentage change within bands, and the lesson was that the vast majority of wage changes during the immediate aftermath of the crisis was stuck at zero. It seemed that the prices of labor were sticky in a nominal sense. No one was really taking wage cuts. Jobs were eliminated or stuck at zero increase. There was legislation in place for states to incentivize job sharing like was more broadly seen in Germany but to my knowledge there was little take up of this structure. If you were employed, you had extraordinarily little power and you were happy to have a job since most people knew people who had lost jobs or housing or both.

Were I better at Google, I might be able to find the exact chart I am thinking of, but I cannot. Instead, below is a proxy that shows in aggregate just how close to the floor wage changes were for years after the crisis.

Playing with the different time series on FRED will show you different looks at this change, and if you overlay various inflation measures you can see that there was not much move in real wages either during this time.

One of the reasons I heard during this time was that policy makers were laying off the gas on both monetary and fiscal policy tools was that they were afraid of inflation. Many of people who were in the position to be of influence on economic matters had been in graduate school or were young scholars during the inflationary period that coincided with the Vietnam War and Nixon’s closing of the gold window signaling the end of the Bretton Woods system and the full introduction of free floating fiat currency. We know of the story of the Volcker shock and the recessions of the early 80s as breaking the back of inflation, but what we do not talk about often is how the political move of breaking unions was not just a signal that labor was waning, it also had monetary policy effects. The neoliberal project of favoring business was aided on both sides of the Atlantic. Thatcher went after the miners, and Reagan sacked the striking PATCO Air Traffic Controllers union were signals that it was open season on unions. With the decline in union density we see that there was a parallel decline in inflation. This gets us to the point where economists are calling the period the “Great moderation” and claiming to have ended the business cycle. 

The thing about economic history is that we are often fighting the last fight. Worried about inflation so we do not use proactive policy to make sure everyday citizens do not withstand the worst of the crisis. We bail out all the banks and pat ourselves on the back that the bailouts eventually returned 1% on invested assets while people lost homes and livelihoods and we started talking about secular stagnation and worried about hysteresis and threw around terms like “the new normal” instead of asking if there were more we could do. And hopefully we will learn from this crisis to be better prepared for the next one. The problem is that you cannot run back time or make experiments on the results of macro policy. So, when things go bad you must either say we could have done better or convincer yourself that there was no alternative. 

But there were alternatives to the great inflation. 

The Keynesian economist James Tobin was arguing in 1984 that “Inflation control is a public good” (53), noting that it does impose a genuine cost on society. This is hard to believe for someone of my generation, where the highest the Fed funds rate has been about five percent, and the CPI has been quiescent. Tobin, in his article “A Social Compact for Restraint” argues for just that, a “mutually assured disinflation” (54). What Tobin lacks in his argument is a realistic theory of change, hoping for a nation consensus through presidential leadership to self-impose wage policies to keep inflation down. While I am hopeful for coming together in a kumbaya moment between labor and capital, we saw how history actually played out, where the power of capital overwhelmed labor to the point where labor in its organized form is a very week countervailing power. 

To make Tobin’s idealized world in 1984 a possibility, we really need to look at how power exists and is wielded in the economy. You must create the incentives to make that change you see in your mind’s eye, incentives for both sides of the labor / capital divide. The English Marxist David Purdy speaks of just such a balance in his review of the history of the 70s, “The Wages of Militancy”. Purdy advocates for just the same sort of social compact that Tobin hopes for, in the accelerating inflation period of the 70s to be a time for “the labor movement to bid for hegemony by offering to accept voluntary pay restraint in exchange for structural reforms aimed at democratizing the economy” (1). Purdy’s’ work contains a lot of the “inside baseball” history of the ideological infighting within the English Left in the 70s but there are some nuggets that we can take from him. One is that he points out that the denialism of the trade unionists to accept that their continued wage increases had macroeconomic effects (9) so that the denialism led them to not see that they could play a role in containing them. Purdy also emphasizes the social problem of high inflation, even for a labor government, in that high and unpredictable inflation decreased business confidence and bringing inflation under control to prevent social unrest (12). The problem with bringing inflation under control from the top down is that the way we do it is by creating unemployment or trying to use wage and price controls. The mechanisms used did not work, so the conservative government ended up using the first choice, an event he calls a “bloodless civil war” (15). 

For Purdy, there was a real alternative in having a strong labor movement that would have been willing to accept lower or frozen wages in exchange for “workers’ participation in decision-making from the shop floor to the company boardroom, via a system of elected worker directors” (15-6). What we see Purdy outline is a missed opportunity since the real history is one where labor lost power in over a decade of Conservative rule in England. Unfortunately, we cannot run time back and break the inflation through worker power as Purdy suggests. This has knock-on effects in that Labor was weakened and had no voice in the aftermath of the next crisis. What I think it does, however, is raise an interesting question of what it means for worker power overall. Purdy focuses on wage bargaining being a driver of inflation, where “it is hard to imagine a clearer example of individual rationality leading to a social pathology” (14), so that when we talk about worker power we should keep the big picture in mind. But what it also suggest to me is that there are many angles to the call in the Manifesto of the Communist Party, the famous closing lines that the workers of all lands need to unite because there is nothing to lose but our chains. The call is for revolution, but what Purdy outlines is revolution by another manner, in that labor becomes capital, or at least their concerns are equal and parallel in terms of management of firms. There is more than one meaning of worker control of the means of production, I guess.


 
Cited

David Purdy, “The Wages of Militancy: Incomes Policy, Hegemony and the Decline of the British Left,” http://david.purdy1@btopenworld.com, July 7, 2006
James Tobin, “A Social Compact for Restraint,” Challenge, March-April, 1984
U.S. Bureau of Labor Statistics, Average Hourly Earnings of All Employees: Total Private [CES0500000003], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/CES0500000003, February 17, 2020.

Diamonds Do Not Shine, Only Play With Light: Charles Joseph Mihelic Remembered

I’m going to cry. We lost a father and husband. We all lost a friend. I lost a hero, a man larger than life so I never needed to read comic books because I had his stories.

I wrote an obituary for the papers, checking the boxes that the genre requires. But first I wrote a more true version.

It is with a heavy heart that we must share with the world the passing of Charles Joseph Mihelic, MD. On the second of this month, Chuck suddenly and unexpectedly, slipped the confines of this mortal coil to challenge the deities of all canons to fistfights and matches of wits. We wish him well on his quest, but there are many here who mourn him. We have called him by many names: Joey, Chuck, Babe, CJ, Dad, ToeToe - maybe even Chas at a point in the 70s but a lot of things happened during the seventies that not everyone remembers.

But we do know that in the seventies he met the love of his life on an April Day in a small town in Alaska. With her, Mary Douglass Bowman, he lived a life that would be hard to contain between the covers of a book, let alone be done justice within the limitations of this mournful missive. Any roll call of the lives he touched would be incomplete as he lived a life of service to the communities he lived in, seeing people sometimes in the worst day of their lives and using his training and native intelligence to save lives and try to mend what was broken.

We can note those with holes in their hearts never again to be filled. Mary, with her constant companion gone. John Patrick Mihelic, a little brother now without his boyhood protector. Children Amanda Marie, Catherine Ann & husband Scott Schlobohm, John Edgar & wife Anita, and Norman Joseph left with only their memories. Grandchildren Bonnie, Joe, and Lilly for whom he will live through our stories. Let us not forget Pat Neptune, who was a valued aid in the later years.

We mourn Doctor Mihelic because of these stories. We mourn a man who saw the world as it was and tried to create a new reality around him. He did things his way. He did this in part because he had to. Born in the South End of Saint Joseph, Missouri, options were limited. You could work at the slaughterhouses, or you can seek your story in the wider world. His ticket was the military, signing up to serve his country in 1969. Then there is the biography. He trained as a Special Forces Medic, went to school and trained as a doctor at UMKC. He worked as a doctor. And then rejoined the military and helped keep Kuwait free in Desert Storm. He then moved to West Virginia and made a home here as he worked in various medical facilities in the north central part of the state.

But - this life that we live is not wholly defined by what you did at work. It is only a part of who we are. The life we live is not just filled with the activities we do, Every time we start listing the worry is that we will forget something. By these measures he lived a full life, from cliff diving and swimming with the sharks to mountain and rock climbing and martial arts and .. it goes on. The body betrays you and you slow down and try to keep active, turning to things like woodworking and cooking. Always learning, reading about history and staying abreast of political developments.

For us, this is not the defining measure of a man. These are the stories that matter. It is the people we touch in our lives that is the most defining legacy we leave. This has been illustrated all this week, as the immediate family has been overwhelmed with the outpouring of love and affection from all the lives he has touched. That these relationships are now but memories, this is why we mourn.

So, I want to talk about my dad. I want to remember. I want to remember the smell of Old Spice and Captain Black. I want to remember the rough skin on his cheek as I kissed him. I want to remember family pile-ons . I want to remember camping and building models and soccer on the flat and wanting to work out with him just to be near him as we listened to staticy talk radio. I want to remember looking for him in the crowd at all my football games and wanting to impress him in all that I do.

I still want to impress him in all that I do. I want to live a life that he would be proud of, because he was my model of masculinity. It was not the sporty things he did though. It was not academic or professional success. What I want to model, what I really learned from him is how to love. Watching him love Mom over the decades was the best example I could have had about how to be the best man you could be.

Dad was multifaceted, and we all have our own stories, but what breaks my heart the most is seeing that story come to an end. If I can make Anita feel half as loved as Dad made Mom feel, I will have lived a successful life.

In this time, and as long as you live, please share your stories. It is how we keep him alive.

Learning From the Past: Ideas for Full Employment Now

One of the things that I have struggled with in my studies is in how we look at economic history and how we use that to guide policy for the current moment. Looking at history can give one pause, but it can also create hope for a better world. The hope comes not just from bright linings in current developments, however. Going back to recent economic history, we can trace the path from war to depression to war. By seeing how responses to a crisis were planned and how they played out, we can hopefully evaluate what worked and what did not work to learn from prior times because even if the sweep of history introduces new complicating factors each time, it often rhymes.

One broad period we can learn from is the developed countries in the middle of the twentieth century. What you see is that policy makers were aware that the demobilization after the First World War led to slow and uneven growth and had a direct effect on the events of the Second World War. (Keynes saw it by 1919, others took more time). What is amazing is that British policy makers were thinking of a way to reorder society while the allies were still fighting Hitler on the continent. One such illustration of that attitude was “Full Employment in a Free Society,” a report by Sir William Beveridge. In the summary of the larger report, he makes a claim for three strong needs, one for peace, one for a job when you can work, and a need to have income support when you cannot work (1). The focus in the essay is the problem of unemployment, which for Beveridge is not just an economic problem, but also a moral issue for the “hatred and fear which it breeds” (6). The diagnosis of unemployment is one that focuses on spending through the business cycle, in that it is uneven and unpredictable and ultimately in the aggregate average just too low (7), too concentrated in certain cities ( 8), and in the British case too focused on international trade (9). To cure the ill of unemployment, Beveridge suggest that the answer is to always make sure that the demand for workers outpaces the number of people available to work (10), or “Jobs rather than men should wait” (12). 

Here it is easy to dismiss the idea. Of course, it would be nice if people all had jobs that took into consideration of their fundamental rights. However, Beveridge had a recent and valid comparison. The war itself showed that the lump of labor fallacy was not true. If the state wanted to bring everyone into the labor force and supply them with productive activity, they had the ability to come and do their job to defeat fascism, as “The demand for man-power in total war is unsatiated, and insatiable” (15). Just as in war there is always work that is undone, so the same follows in peacetime. In the good times and the bad, the lack in the economy is not want, but the “lack of purchasing power” (16). 

How do we do this according to Beveridge? We cannot rely entirely on the state to do it. We need to make sure that it is “a function of the state in future to ensure adequate total outlay and by consequence to protect its citizens against mass unemployment” in the same way that it is the state’s responsibility to protect the citizens from physical violence (20). Beveridge is at pains to point out that this does not mean full state control as in the Soviet Union but through a combination of encouraging consumption, added public spending, or even developing exports (21).  What Beveridge proposes in his essay is a long-term plan to reorganize society so that it is more equitable to everyone in society and to eliminate as much suffering and want as possible through the agent of state policy. It is prioritizing the wants and needs of everyone - planning as a social tool and an ongoing process, where the budget is not just about taxes, but how to manage the available labor, a “Human Budget” that looks at the resources available (26). Importantly, the vision outlined in the report is one that is proactive, aiming for “continuous steady expansion” (32) and not reactive to the business cycle, where society, “demands better houses and transport and light and power and schools and hospitals, without waiting for the opportunity when business men cannot make profits by selling less important things. Public outlay should be looked on as a means of meeting collectively urgent national needs, not as a gap-filling device” (35).

We can use this period as something to look back to as a guide for our policymaking. The economy was hot but there was a transition in the air. The memory of Depression was not too far away. In the postwar time, the economy in our imaginations became personified by the early television sitcom. There were jobs available for people to go to from their homogeneous suburb. These were jobs where one job could support a whole family and the expected leisure activities of that family while in the domestic sphere the wife helped raise the kids. It was the payoff of the struggle against fascism, and even if the red menace loomed over the oceans, the American Way was the best way as the US was the factory to the world that was rebuilding itself from the rubble of the Second World War or trying to create itself from the shadow of the colonial powers. We call this time the Golden Age of Capitalism, and the French call it Les Trente Glorieuses, because this was a time when capitalism just without trouble worked. The planning of the war years worked and the transition on both sides of the Atlantic was successful in that the depression was not entered into again when peace came. 

The thing about that is that if you start to look at the history of the time, it was not all Leave It to Beaver monochrome. This golden age existed in conflict with a lot of uncertainty and distrust towards the prevailing order. In 1954, the Supreme Court had to tell the states that separate was not equal and we are still fighting that battle today. Women who were demobilized from their role as the prime movers on the home front during the war felt anger and disenchantment from being marginalized, and we saw the rise of postwar feminism represented first in authors like Simone de Beauvoir to Betty Friedan through Gloria Steinem. Even the winners of the postwar expansion, the straight white males, saw pushback against the created norms, as the fiction of John Ford and a raft of midcentury male writes will illustrate, as well as the more systemic evaluations of the culture like C. Wright Mills’ White Collar or Riesman’s The Lonely Crowd show. In addition, we can easily find the cultural and economic dropouts from the Beatniks to the Hippies to see there was an undercurrent of disenchantment when things were finally working.

I play with this dialectic in my mind because for my entire life, the economic and political landscape has moved. My father grew up in a world where there was a larger manufacturing base with long-tenured employees who would then retire on a pension from that company, but there was some class conflict but the unions and the corporations had an uneasy truce for the most part. My generation has seen jobs casualised and society atomized in a way that would astonish Riesman. We are 20 years past Putnam’s coining the idea of “Bowling Alone,” and social media has made this anomie even worse. Thankfully, there has been a political reaction to this. Unfortunately, the strongest reaction that has been successful so far is the movement to isolationist populism that is represented from the Tea Party movement through to the election of Trump. What gives me hope is that there has been a reaction from the left that started with the bank bailouts and opened the way from Occupy Wall Street through to the Sanders campaigns in 2016 and 2020. The pendulum has been pushed far enough that there is now some push back to the idea that the rich have earned the just deserts and anyone struggling are just losers who deserve these struggles. 

Reading the summary of Beveridge’s report gives me a bittersweet feeling. In the darkest period of Europe’s 20th Century, policymakers were able to look forward and embrace ideas of equity and lack of want and realize that in the fight against fascism there had to be a fight for something as well. The report makes it clear that it is not a call for socialism but leaves it open as a potential path. The amazing thing from my vantage point is that they were ever able to implement any of it at all. America had a more paternalistic capitalism than we do now, but the welfare state then was more embedded in the corporations so that it was an ideal and never universalized. To call for policies outlined in the report would get you painted as a radical by bad faith actors – both then and now. “Radical” is true in the meaning the Beveridge looks at, in terms of getting at the root of the problem. I keep asking myself, if we must have some sort of capitalism, can we at least go back to that as an outline?  With the path we have taken and the lack of incentives and historical impetus to take us off the path, I am not optimistic but would be happy to be proven wrong. Perhaps we need not be looking backwards but forging a new way forward.
 
Works Cited:

Beveridge, William Henry Beveridge.  (1944). Full employment in a free society: a summary.  London:  The New Statesman and Nation, and Reynolds News

Science is a Process

There are varied pedagogical approaches to teaching science.

I have a weird CV so I might have perspective on this.

Teaching chemistry, you go from “the smallest piece of a substance that can exist was called the ‘atomos’ by the Greeks” to VSEPR theory at the intro level.

You show many different models that over the course of 200 years represented the best guess of the makeup of the atom and how these came together to make molecules and ions. Many of these still have explanatory power. The working model of the atom I use in my head is the solar system model, even knowing it is “incorrect”.

The thing is that most students will not go deeper. What you can illustrate through this process is that science is a process of discovery. Rutherford’s gold foil experiment? Wow, look at all the empty space in the atom! We even teach blind corners, like phlogiston. Heck, we as a society went from there to splitting the atom in 130 years or so. That is incredible progress.

I dropped chem, started writing poems, and was in a bad place professionally when the 2008 crisis hit. I went and started reading up on economics the same way I approached learning chemistry. I tried to stay abreast of the current debates in the blogs and papers, but I went to Smith and Ricardo and Marx and Mill and Bagehot to Hayek and Keynes and Schumpeter to get a grounding of what was going on.

Imagine my surprise when I first took a formal, undergraduate macro/micro sequence where none of those people’s thoughts featured. We started out with graphs and roles of money but it all existed as received wisdom. The same thing happened when I took the same sequence for my MBA. It was only when I took the sequence again at Roosevelt that any historical perspective was brought in.

This is the problem in that the intro classes are what the science is for a lot of students. It is a received set of axioms that are unchangeable even in the face of empirical evidence. “Look at my graph, of course the minimum wage increases unemployment,” they say. “It’s Economics 101”.

What this misses is the idea of economics as science and thus as a process of discovery. It is harder than in the “pure” sciences because humans are more erratic than atoms, but we do a disservice by not showing the process.

I'm Already Against the Next War

In 2002 to 2003, I stood in protest against the Iraq war.

Today I stand in defiance of escalation of the existing war with Iran. The minute we laid sanctions on that state, we started acts of war against innocent civilians.

Yesterday’s attack by our government on foreign soil is an unnecessary provocation in a volatile region.

Our job, as lovers of the best in humanity, is to find those who stand unequivocally against violence and to stand with them.

Here I am.

Get a PhD: A Personal Essay Maybe Some Advice

It is now the middle of December. I have all of my applications finished. I applied to twelve schools, and I want to go to every single one.

Well, for the most part. I am still trying to get a straight answer from one school to see if they need official transcripts before they will consider my application.

I hope they do not. Everyone else wanted unofficial transcripts, and it was nice to just upload pdfs and be done. This was a bit different from the last time I applied to a bunch of graduate schools at once. Back in 2004-5, I had to get the packets together myself. Everything was on paper. It was probably easier for my letter writers since they just wrote one letter and ran it off. I think they gave me copies to put in the packet. I remember writing checks for the application fees and feeling like sending those packets off at the Morgantown post office was the scariest thing I had ever done.

It was the second scariest thing maybe since it was the second time. When I graduated, that year I applied to four MFA programs and did not get into even one. I actually got a thick envelope back from Oregon. However, it was about housing. I waited for the formal acceptance, but their next correspondence with me was a single page rejection letter.

I did not know what to do with myself then because graduate school was literally my only plan. I wanted to get out of Morgantown, and needed somewhere to go. Then I did not get in anywhere so I ended up keeping working at the same pizza place and drinking and hanging out with the same people (who are excellent, of course but that was not my bohemian dream).

In the ultimate irony, every time I saw someone from the department that year they would ask me why I did not apply to WVU since I most likely would have gotten. I did not apply to WVU because I did not want to be “stuck” in Morgantown, which seemed like an easy thing to do. In addition, of course, there I was stuck in Morgantown.

Also that was the year I got promoted to manager and then got hit by a car and spent a good chunk of that time high on Percocet, but it was also the longest time I went without drinking until I experimented with sobriety in 2016. That bit of clarity helped me as I applied to eight schools. I did not even retake the GRE since I didn’t have the money too, but it was worth the application fees for one last chance out the door I went for MA schools instead of the MFAs and got into at least half of the places I applied to, and got waitlisted at least one more. I think only KSU offered me any money so I went to KSU.

I went to Kansas State and met a bunch of cool people and fell in love and realized I did not want to go after the PhD in English. The path is long and then on the other end even in 2005 there was a horrible trend where you almost had zero possibility of getting a job. Something like one in eight people who start a PhD ended up with a tenure track position. Only 12%! I would say as a justification. I also knew smart people in the department who were acting as instructors. One thing I would do differently is I would have actually written my thesis but there were a number of factors that the incentives were not there. Therefore, I spent two years without a degree.

What I did do was realized I liked teaching so I got a teaching job and then lost it because teaching high schoolers is a vastly different experience than teaching college kids. Then the recession happened so I had a good period to figure out what I wanted to do and what interested me.

I got into economics, following the blogs, trying to read and understand the classics and figure out why the managers of the macro economy had fucked up so bad. You know why they fucked up? The economy is complicated; people hoard resources and those who hoard resources structure the power dynamics to justify and continue that hoarding; and the high princes of the economics caste thought they had the business cycle solved, so everything would be fine.

On the other hand, that is just one interpretation. Who know if the business cycle is “solvable” under capitalism? Maybe that is the appeal of Minsky – he just shows the mechanism of in what form it is broken, and you can go to Kindleberger to see that happen repeatedly.

The thing the crisis and the recession did to me was to see that I needed to figure out something practical. I spent a year and a half trying to figure out how to get back into teaching even though I had a bad experience with the high school kids – maybe only “half bad.” I liked teaching some of the times and coaching track was great. It was just that so many kids did not want to be there but were there so they acted out. Maybe I should have been teaching English and not chemistry. Weirdly at the time there was such slack in the job market that the schools were asking for teaching certificates for substitute positions, I applied for the Chicago Teaching Fellows (Twice!) and did not move past their cattle call interviews, and then I applied for a Master’s in Teaching at UIC and did not get in.

Not getting into UIC was a moment I took as a sign that teaching as a profession was not for me. As an aside, it is weird how ten years ago the programs were oversubscribed and now the profession is in crisis because people are not attracted in the programs. Young people are brought in and chewed up, there is an amazing amount of attrition because it is such a hard job and it is poorly paid. Put that up on the wall with social work – the intrinsic compensation of doing good is not always in balance with the difficulty of the job in its requirement that you remove the boundaries of who you are and totally subsume yourself in the profession.

What I did do was try to take this thing that had taken up a lot of my attention for the past couple of years and see if I could help. Economics was broken and I alone could fix it. I participated in the blogs and wrote Amazon reviews about the books I was reading. I gained confidence in the idea that I knew what I was talking about. I figured the next step was to formalize my education so I was in correspondence with a professor at UIC about what I could do to enroll in the Master’s program for economics. Talking about my experience and my transcripts, she suggested that the best path to make myself ready would to be enroll in some undergrad classes since I had not taken a single business or economics class at that point. There were two big problems with that. First was that I needed money for school and it is very hard to get loans for undergrad classes if you already had a bachelor’s degree and going back to school meant that I would forfeit my unemployment benefits. Therefore, I doubly could not afford it. In addition, there was the fact that my meeting with her happened to take place on the first day back for school in the fall semester. The earliest I could have started was January when I wanted to start now. Then-now, of course, not now-now.

Then this whole weird arc in my life happened. Trying to actively make changes was not working so I went with the flow on things and it led to some of the most successful professional times in my life so far. I saw an article about this job-training program the city was hosting called “Chicago Career Tech” that was aimed at people who had been middle-income professionals. I emailed the reporter because I could not find the information and he gave me a link. I applied and was interviewed and accepted. They said, “You’re on the medical coding and billing track”. Now, I never saw myself in this realm but my unemployment was about to run out and I was one step from begging restaurants to let me work the line so I said I’m going to do this and do my best. They sent me to DeVry and I got all A’s and I interned with the City and I interned with Community Support Services and after the program was over I took the national certification test and passed on the first try. I then started applying for jobs and was chagrined to find that there was not much out there. The best I found was the same job two different placement agencies were trying to place me at for twelve or thirteen bucks an hour, and it would have been a commute I would have to drive to because it was in the suburbs.

As a side note, this is when I was on Jeopardy, flying to LA by myself because we did not have any extra cash.

But then after a month or so my former supervisor at CSS put in her notice and the CFO, Andrea Finnegan, called me offering me my former supervisor’s job. In addition, at CSS I found a good professional home under the CFO. She encouraged me to learn within the department. Moreover, to take classes. I did a certificate program with Notre Dame to introduce me to nonprofit issues; I started to take those business classes, one at a time from community colleges. I did the practical thing and started talking classes for an MBA at a local college. Through this, I was moving up the ladder. I went from Billing Coordinator to Accounting Manager to Director of Finance in six years as I worked and took classes.

During the MBA, I had a list on a legal pad on what I wanted to do when I finished the program, from learning my bass better to getting a CPA. One of the things on the list was to get more involved with the community, so I started working with the local library in the campaign to pass a bond issue to build a new building. Things were going fine.

Then there was the winter of 2016-7. My grandma died, the bond issue failed, Trump was elected, Andrea was fired, the guy they hired to replace her made me feel stupid, and I ran unsuccessfully for the library board. I was demoted. It was a bad winter.

However, it was good in a way. It made me reassess my personal goals and to prove myself on my own without the shelter of Andrea, as good a mentor as she was. I ended up with a different position in the agency that worked to my strengths and helped build my CV. I also applied for and was accepted to the Economics Master’s Program at Roosevelt. At the time I was not sure of the answer to the question “What are you going to do with it?”, but I have been fortunate to work with peers and professors that made that question irrelevant as the act of studying and developing was reward in itself. The sad thing is it is almost over.

It does not have to be. I have gained the practical knowledge and experience with the MBA and almost a decade now at CSS. However, I want to do the practical impractical thing by going on to get a PhD. I have spent a good part of the last year thinking about this process, from asking professors to write letters for me to researching schools to convincing Anita that this is the thing to do. It is harder to think of making the move as a couple in our 30s than the choices I made in my early 20s. We both have careers. It is a potential hit to our finances. Nevertheless, I was sitting in a presentation at the URPE conference in October of 2018 and I realized that this was the scene I wanted to be a part of. It is not just the blogs and twitter, but real life. Importantly, I have both the learning and intellectual capacity to positively contribute to the community.

I write this now because I keep thinking back to one of my first blog posts I wrote back in 2013, which feels like a lifetime ago. It is short and titled “Don't get a PhD”.

 In it, I say:

I hear it's a waste of time.  Just prove you can do the math with an MA.  There's no reason to write a dissertation that no one will read.

Unless you got into MIT, Harvard, or the University of Chicago.

No matter what, at that point, you can be Megan McCardle.

I was wrong. Get a PhD. You only live once. Heck, I am still waiting on my responses from Harvard and Chicago. Send those applications out. The deadlines are getting close.

A Science at Its Limits: Criticizing the Most Recent Economics Nobel

Here's why I think there is some pushback against the most recent Nobel in economics. 

You go into the science wanting to make some sort of big difference.

You want to end poverty or make billionaires face a lower tax burden or make capitalism work however you think is optimal within your worldview.

But what RCTs do is show the limits of the science. You can design mechanisms so more people are protected from malaria through smart incentive structure on mosquito nets.

And it saves lives! Saving lives is good. But it feels small bore.

If that's ALL the science can do, it gives lie to the grand ambitions you enter in the science with. By awarding a Nobel to the practitioners of RCTs in development, it is an admission that the limits have been reached.

For me this is the same as the limits of behavioral economics. I consciously construct nudges for myself after years of reading in that subfield.

The question is what can you do with it if you can't necessarily replicate it and use irrational actors breaking micro assumptions as a foundation to build new theory on?

You can help people save more for retirement. And you can make sure men pee in the toilet. One big, another small. But are we at the limit there? Where do we go from here?