http://web.archive.org/web/20130120215549/http://www2.hawaii...
I wouldn't say I am learning exactly, but it's interesting to read from his point of view. Thought I'd post the link.
http://web.archive.org/web/20120201172033/http://www.math.ha...
But, he rambles a lot on there and weighs the pros and cons of being a professor in Hawaii. Basically, though, his final sentence says it all: "I've got to get out of this place."
Some more about his salary he keeps talking about, " Unfortunately, though, the one thing at the University of Hawaii that was not under my control, nor under the Math Department's either, whether by ``shibai'' or otherwise, was my salary. I had known when I accepted the position here that I was being offered a salary that was too low, but what I had not realized was that, unlike Kansas, faculty salaries at the University of Hawaii are controlled by a rigid civil-service structure, so that the salary one is hired at determines one's salary for the rest of one's life. But added to that, the nation soon entered an extremely drastic phase of Reaganomics inflation, and the State of Hawaii responded by giving only minimal salary raises (0% one year and 2% the following), and the entire faculty here at UH was becoming financially desperate.
One of the reasons I dropped out of active mathematical research was a realization (even before Reagan came into office in 1981) that it would soon no longer be financially feasible for me to continue working here. And as I stopped letting my life be taken over by doing research, and after being promoted to full professor had finally jumped through all the hoops that young academics (although I was no longer exactly young) are require to jump through, more and more I was asking myself exactly what it was that I want out of life, and to what extent my career as a mathematician was providing it. "
He also mentioned before about thinking about becoming an actuary; and, how another math professor started taking electrical engineering courses at the university and later left for California to become an engineer in the aerospace industry (which turned out to be poor timing since the aerospace industry went under major turmoil in California during the late 80's).
Then he talks about how he has a strong distaste for living in Hawaii here:
http://web.archive.org/web/20120218124307/http://www2.hawaii...
It gives a very intimate perspective from a man who has lived the life of being an academic, and what that entails. I don't recommend reading his entire web site, since he writes quite a lot. But, for anyone interested in academia, I think a perusal is in order. He does talk a lot about what life being an "institutionalized" academic is like. It's pretty sad, and it made me realized I would never want to get into that field.
1970 5.7
71 4.4 - Nixon's wage and price controls in August
72 3.2
73 6.2
74 11.0 - Ford becomes president
75 9.1
76 5.8
77 6.5 - Carter becomes president
78 7.6
79 11.3
80 13.5
81 10.3 - Reagan becomes president
82 6.2
83 3.2
84 4.3
85 3.6
86 1.9
87 3.6
88 4.1
89 4.8 - G. H. W. Bush becomes president
90 5.4
Why do people, who like I lived through these periods, believe the opposite of the truth? Not even sure if this is this guy's revolutionary truth (didn't bother to read much of his essay) vs. the boring bourgeois I fancy myself living in.
The Volcker Fed stopped the inflation of the US and Volcker was hired by... Carter. Also as you can see inflation was already 11 percent two years before Carter. The main person who is responsible for mismanaging inflation was Fed Chairman Burns (1970-1978).
I don't claim to have a good understanding of macroeconomics (not sure anyone really does), but I'm pretty sure fiscal policy has some effect. But since we're discussing a sequence of numbers, that hardly matters. What does is that Carter did indeed "find religion" on a number of fronts (including defense after the Soviet invasion of Afghanistan), and in the case of the Fed, replaced Burns with Volcker in August 1979, albeit way too late to save his presidency. What's critical with Reagan is that he recognized Volcker was the right guy for the job and fully supported him when things got ugly, e.g. big hikes in interest rates (to a prime rate > 20%!!!) that along with the delayed phase in of the supply side tax rate cuts gave us a nasty, sharp recession.
That's when Reagan's economic policies were labeled Reaganomics, a term which our betters dropped like a hot potato when they had their desired effect and Reagan ran a "It's morning in America" 1984 reelection campaign. He deserves more than a little credit for the moral courage to persevere in the face of near G. W. Bush opprobrium while he let that harsh medicine work.
And the bottom line is seen in those numbers. Whatever Reaganomics was, it manifestly wasn't an increase in inflation.
Once a Fed Chairman is selected by the president he cannot be removed during his term. This is the principle of central bank independence. When the board decides that they will hike rates there isn't anything to stop them. They can be dismissed only after each their terms end (7 years, 4 years for the chairman and vice-chairman).
That inflation is mostly a monetary matter is a key lesson from the 70s and there is very convincing evidence especially from that period. Germany was restrained monetarily and performed much better than France, Britain or the US. (Highest inflation was 8%).
There are of course cases where fiscal policy has an indirect effect on inflation through monetary policy:
* Countries sometimes pressure CBs to lower rates to finance government deficits. This is a big problem in developing countries. * Fixed exchange rate regimes. * Intervening in the supply or demand of some significantly weighted component of the CPI () * The liquidity trap (not really known, this is really recent and not much data on it)
This is a good resource for basic (short run) theory, Short-Run Fluctuations by David Romer: http://elsa.berkeley.edu/~dromer/papers/ISMP%20Text%20Graphs...