(adapted from my 1996 commencement speech to the Economics Department at U.C. Berkeley)
My fellow graduates in economics, today we face the terrifying discomfort of not being students any longer. Upon receiving our diplomas, many of us switch from the statuts of student to the status of unemployed.
Fortunately, as Economics students, when we stand in an unemployment line, we have a much better understanding of why we’re there. Unfortunately, we have additional problems to deal with. Along with a tight job market, we shoulder the burden of explaining what Econ majors are supposed to do after graduation.
After all, economist is not listed in the yellow pages. Nobody ever says “Honey, you know what we need to fix this problem … we need a good economist.” Nobody needs a good economist in the middle of the night. People need florists, taxi drivers, dentists, escorts, clowns and astrologers. But everyday Americans don’t seem to want or need us.
Part of the problem is that we economists can never agree on anything. In our field, you have one professor who argues “monetary policy is the best way to stop inflation” and another professor who says, “No, monetary policy is the worst way.” So what do we do? We give them both Nobel prizes!
We are so famous for disagreeing with one another that nobody believes we engage in any sort of an exact science. Like the joke says, economists have predicted nine out of the last five recessions.
Somebody should do a study on this! Compare the number of people who choose the course of their lives based on economists vs. horoscopes. Economists vs. fortune cookies vs. psychic hotlines vs. Dear Abby vs. Ouija boards vs. Latoya Jackson vs. conversations with the house dog.
But can we blame them? Who wants to listen to economists after we announce a booming economy to families who still can’t put food on the family table? Who can trust us when the president’s Council of Economic Advisers releases a report which triggers the April 23, 1996 USA Today headline: “Downsizing Not All Bad, Study Says.” What does it say about our field when we proclaim the good news of millions of jobs created when my friend John Matsubara has two of those jobs — and they’re both through a temp agency!
Something is suspicious when General Motors which used to be the biggest private employer in this country is surpassed by — guess who — McDonalds. Something is fishy when G.M. used to be the biggest private employer in this country but now is the biggest private employer in Mexico.
Everyday Americans do not listen to us economists because we do not appear to be having conversations with them. We have conversations with corporate investors and congressional committees. We receive inquiries from business page reporters. The world wants more astrologists than economists because astrologists provide a recognizable service to everyday people.
Now I am not here to degrade our field of study. Moreover, I am not here to promote astrology. Astrologists guided Nancy and Ronald Reagan and we saw where the economy went with those two.
On the contrary, I submit to you that we economists can explain human behavior. We can explain the growth of prisons, the LA ’92 rebellion, the backlash against illegal immigration, the Republican Revolution, and the decimation of affirmative action.
But during the half a decade I’ve been here (sorry Mom and Dad), the media never ran to talk to professors of our department for any of these aforementioned issues. The media preferred a soundbite from Mike Tyson over Laura Tyson.
The problem then is not that economists don’t speak the same language as ordinary people, nor is it just media neglect. Part of the problem is our narrowing vision; our field has increasingly become a non-social science.
We perform studies of the correlation between economic recessions and exchange rates. But we do not perform studies of the correlation between recessions and hate crimes, recessions and redlining, recessions and domestic abuse, recessions and racism.
We economists like to talk about “externalities.” In our models, the costs of job dislocation, health care insecurities, rising family violence, environmental damage, and cultural collapse are all deemed “external.” External to what? If we do not internalize these “externalities,” we economists risk providing a serious dis service to this country.
So let’s be specific. Indeed, over the last two decades, the economy did get bigger — our national income per capita grew 28% — but the benefits were channeled to those with the highest incomes. In fact 3/4 of the growth went to the richest 1% of the country. So is it fair to brag about an expanding economy if only the Grey Poupon guys benefit?
This country doesn’t need an invisible hand right now — it needs a hand up. Millions of people are beginning to see Adam Smith’s invisible hand and all they see is a big fat middle finger.
We need to change the rules. We need to use these walls along the Mexican border — not to stop migrant workers but to stop corporate flight. We need to raise the minimum wage and then we need to start talking about the idea of a maximum wage.
There is something fundamentally foul in this country when wealthy CEO’s, such as Robert Allen of AT&T, can fire 40,000 workers and stockholders reward him with a $15 million bonus. With the social contract changing from ‘Reach Out and Touch Someone’ to ‘Reach Out and Fire Someone’, somebody tell me how to get values from Sesame Street to Wall Street.
In this global economy, we need to institute accountability into these multinational corporations that have more money and power than most of the world’s countries. With the Giants now playing in 3Com park and students attending class in the Wells Fargo Auditorium, I can only imagine when future generations of Berkeley graduates receive their diplomas in the Gatorade Greek Theatre and attend a reception by the Kaopectate Campanile.
We graduates need to reclaim our field and ground it in society so that as future economists we provide a service to all of America. We must taking the meaning of democracy to a higher level of economic consciousness and social equity. In all the fancy shmancy econometric models we design, let’s toss some moral ideas into the equation.
As we enter corporate boardrooms, business offices, congressional corridors and meeting rooms, we need to talk about long term efficiency not short term profits. We have to inject a new compassion and a stronger conscience into the veins of our economic analysis. Finally, we should promote the idea of economics as if community matters.
Once we can do this, my fellow graduates …we can put economist in the Yellow Pages.
Let’s give the world a reason to want economists more than astrologists. Let us begin the work.
Originally published in the Chicago Tribune, Toronto Star, San Francisco Examiner, Sacramento Bee, The Times Union, Austin American-Statesmen, Journal of Commerce in May 1996.