John Cassidy's Blog, page 125

Interview with Kevin Murphy

This is the sixth in a series of interviews with Chicago School economists. Read "After the Blowup," John Cassidy's story on Chicago economists and the financial crisis. (Subscribers only.)

Kevin Murphy is one of the best-known Chicago economists from the post-Lucas, post-Fama generation. In 1997, he was the recipient of the John Bates Clark Medal, which is presented to the best American economist under forty. Although he is primarily a microeconomist, Murphy has published articles on a wide ...

Interview with James Heckman

This is the fifth in a series of interviews with Chicago School economists. Read "After the Blowup," John Cassidy's story on Chicago economists and the financial crisis. (Subscribers only.)

I interviewed Heckman by telephone in late October. I began by referring to a piece in the University of Chicago Magazine in which he appeared to absolve Chicago economics of any blame in causing the financial crisis. How did he react, then, to the recent criticisms of Chicago School economics from Joseph S...

Interview with Gary Becker

This is the fourth in a series of interviews with Chicago School economists. Read "After the Blowup," John Cassidy's story on Chicago economists and the financial crisis. (Subscribers only.)

I met Becker in his office at the economics department. I began by telling him I had been speaking with his friend and co-blogger Richard Posner, and I asked whether he agreed with Posner that the events of the past two years had called Chicago School economics into question.

Gary Becker: No. I think the ...

Interview with John Cochrane

I interviewed John Cochrane in his office at the Booth School of Business, and I began by asking him about the economics of today's Chicago, and how it differed from the strident free-market school of a bygone era—the Chicago of Milton Friedman and George Stigler.

John Cochrane: This is not an ideology factory. This is a place where we think about ideas and evidence. Gene Fama is in the next-door office. Dick Thaler is across the hall. Rob Vishny is just down the corridor. The Chicago of...

Interview with Eugene Fama

I met Eugene Fama in his office at the Booth School of Business. I began by pointing out that the efficient markets hypothesis, which he promulgated in the nineteen sixties and nineteen seventies, had come in for a lot of criticism since the financial crisis began in 1987, and I asked Fama how he thought the theory, which says prices of financial assets accurately reflect all of the available information about economic fundamentals, had fared.

Eugene Fama: I think it did quite well in this e...

Interview with Richard Posner

I spoke to Posner in his chambers at the Federal courthouse in downtown Chicago, where he sits on the United States Court of Appeals for the Seventh Circuit. I began by telling him that I was researching an article about how the financial crisis had affected Chicago economics, and, indeed, economics as a whole.

At this distance from the financial blow up, what was the nature of the intellectual challenge it presented?

I think the challenge is to the economics profession as a whole, but...

The Chicago Interviews

Apologies for the delay in posting the interviews I promised. Before putting them up for public inspection, I thought it was only right to ask the interviewees for approval. Thankfully, everybody I spoke with agreed to be quoted at greater length. One thing I will say for Chicago economists—and it has been true for a long time: they are, for the most part, genuine intellectuals, not mere opportunists or party hacks, and they enjoy the cut and thrust of intellectual debate. As Gary Becker put ...

The Chicago School and the Financial Crisis

Happy New Year everybody. I've got a new article in this week's magazine about how free-market Chicago economists have been reacting to the financial blowup. If you have a subscription to The New Yorker, you can read it online. If you haven't got a subscription, I'm afraid you will have to take one out online, go the newsstand—very twentieth century, I know—or ask a friend to fax you a copy.

Several people have asked why the piece isn't available online. The answer should be obvious. In...

Tiger's Mental Error

As an exercise in crisis management, the Tiger Woods story, now entering its third week, presents a fascinating case study. My colleague Jim Surowiecki has been writing some interesting stuff about how Woods's corporate sponsors have reacted to the endless revelations about Tiger's extramarital sex life: after initially standing by him, some of them are now cancelling their endorsement contracts.

We (and Tiger) should expect no more from profit-driven public companies. But what about Tiger a...

Note to Ben Bernanke: Beware the Ides of Time

Congratulations to Fed chairman Ben Bernanke on being selected as Time magazine's Person of the Year. As I've said numerous times, I think the Fed did a terrible job in the period from 2002 to 2007, pumping up the property bubble with its low-interest-rate policy, going AWOL on the regulatory front, and chronically underestimating the dangers that the subprime bust represented to the rest of the economy. But once Bernanke and his colleagues grasped the scale of the problem—that realization...