Condemnation and Commendation

Several economic blogs have discussed a silly faculty letter whining about the establishment of a Milton Friedman Institute at the University of Chicago. In her post on the topic, Megan McArdle points to a really sharp attack on Joseph Stiglitz, one of the big names in economics, that I had not seen before. My favorite bit:

One of my favorite stories from that era is a lunch with you and our former colleague, Carl Shapiro, at which the two of you started discussing whether Paul Volcker merited your vote for a tenured appointment at Princeton. At one point, you turned to me and said, "Ken, you used to work for Volcker at the Fed. Tell me, is he really smart?" I responded something to the effect of "Well, he was arguably the greatest Federal Reserve Chairman of the twentieth century" To which you replied, "But is he smart like us?" I wasn't sure how to take it, since you were looking across at Carl, not me, when you said it.

In a seemingly unrelated article, David Warsh explains why Martin Feldstein had a huge impact on economics in the July 27 issue of his Economic Principles. However, if you think about what Feldstein has accomplished at Harvard, you can see why the U of C may need the Milton Friedman Institute to stay competitive. My impression is that economics at the U of C is living off past glories.

It is fun to read about the major leagues.