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Heated U of M economic debate served up respectfully Minnesota-style

 “It was a great success … Discussions were very Minnesotan in the sense that they often got heated but [remained] respectful.”

V.V. Chari, University of Minnesota professor of economics, beamed as he summed up the first annual policy forum of the Heller-Hurwicz Economics Institute (HHEI) that took place recently at the U of M.

If nothing else, the wild dips, swoons and edge-of-the-chasm careens of the economy over the past three years have produced a surplus of adrenaline-laced argument and opinions.

Now as the U.S. political season moves into high gear and the Euro zone crisis continues, you might think any “Minnesotan”-type discussion on economics had long ago been left by the side of the road.

But thoughtful discussion was alive and well as 18 academics, politicians and public-policy wonks from around the country  spent two days cranking down the volume and turning up the lights just before the Thanksgiving break.

The final panel drilled down on health care reform. State Sen. John Marty, a longtime advocate of single-payer health insurance, made the case for universal coverage. “I reject the assumption that what we need is health insurance. What we need is health care for everyone. Think of it more as a public good … like public education, police and fire.”

Douglas Holtz-Eakin, former director of the Congressional Budget Office under George W. Bush and economic adviser to the McCain presidential campaign, took the other side. He presented the free-market arguments against the Affordable Care Act, which he called “one of the most ironically named pieces of legislation ever.”

“We are in the process of delivering to the next generation a broken social safety net as well as a broken economy and an enormous amount of debt,” he said, arguing that the current path is unsustainable. Holtz-Eakin predicted that the next Congress will be more Republican but said it will not have the votes needed to repeal the current legislation.

“We’re just going to have to do more reform. That’s all there is to it. It’s coming,” he said.

“I don’t know what the route forward is,” he added. He remains optimistic, though. that more changes will come,  quoting the Winston Churchill observation that “You can always count on Americans to do the right thing, after they’ve exhausted all other options.”

Throughout the conference, presenters examined whether tax policy “can get better outcomes in situations where markets for insuring other types of risk don’t work very well,” said Chari, the founding director of the Heller-Hurwicz Economics Institute.

He described five areas of “DNA risk” for individuals, alliteratively naming them: disadvantaged circumstances of birth (such as poverty), death, disease, displacement and disability.

The participants — including keynoter  Peter Diamond, a Nobel Laureate and MIT economics professor — “presented serious work, did not talk down to people, and at the same time reached out to a broader community” that included non-academics in the business and public policy arenas as well as the general public, Chari said.

The audience, which numbered more than 150 over the two days, were treated to some provocatively titled presentations, including “The U.S. Is Bankrupt and We Don't Even Know It” and “Measuring Leviathan: How Big Is the Federal Government?” Plus less-colorful topics, such as “Optimal Dynamic Taxes and Insurance and Taxation over the Life-Cycle.”

The full agenda, presentations and videos of the sessions are on the HHEI website here.

HHEI was launched last year “to inform and influence public policy” in the tradition of the distinguished U of M faculty members that the institute was named for: Nobel laureate Leonid Hurwicz and presidential economic policy adviser Walter Heller.

Chari told me he has a commitment from Ernesto Zedillo, the former president of Mexico,  to speak on globalization at a spring HHEI forum, and the second annual policy forum is tentatively focused on financial regulation --  two thorny  topics that could benefit from a healthy ”Minnesotan” conversation.

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Comments (1)

Did the anti-tax doctrine and neo-liberalism-American-style of unregulated capitalism never come up, even though they are probably about to destroy the eurozone and perhaps the entire world economy by forcing austerity on the poor while freeing the wealthy of any sacrifice, no matter how small?