Kenneth Arrow says

1. The family of development economist Hollis Chenery owned the race horse Secretariat (!, related sources).

2. The opposition to putting the Reagan Library at Hoover and Stanford came from NIMBY considerations, not ideology.

3. The historian of Germany Gordon Craig was the greatest lecturer Arrow ever heard [TC: I can’t find any of him on YouTube.]

4. Arrow: “Well, I do remember an awful lot, and it’s not photographic memory.  I don’t remember the page exactly.  I read things in some order, and they come back, but I can’t explain how or why it happens.

…I think it’s just a desire to understand.  I just enjoy learning things.  Learning.  I don’t mean…I like to systematize, not just memorize.  To put them together.  I have this characteristic, even when I was young.  I treat everything like it was geography; in my mind I’d try to put the things on a map.  When I was reading history I’d try to make up genealogical tables, of the kings of England or something.  So I had this tendency to try to systematize things, to try and understand remote sounding things.”

5. His advice for Larry Summers [his nephew]: “Err on the side of too much regulation.”

6. Arrow once spent six months on the Council of Economic Advisors.  His two major effects may have been to veto an American version of the SST and to help veto the digging of a second Panama Canal.

Those are all from the frank interviews with Arrow in On Ethics and Economics: Conversations with Kenneth J. Arrow, by Arrow of course and also by Kristen Renwick Monroe and Nicholas Monroe Lampros.  Interesting throughout.

Comments

Looks like little Larry listened to his uncle!

Summers is a blackguard.

" His advice for Larry Summers [his nephew]: “Err on the side of too much regulation.”

Tell that to Brooksley Born.

https://baselinescenario.com/2009/05/26/derivatives-regulation-brooksley-born/

I'm so old that I remember Congressman Barney Frank on TV saying that "All is well. FNMA/FHLMC were doing just fine."

That was a week before Lehman Brothers and the entire financial system collapsed.

Mmmmm. "credit derivative swaps" (CDS) likely fit all requirements of the definition of "derivative." The problem was too little capital and reserves support compared with the titanic volumes of contractual calls.

I think those complicated (complex is OK, complicated not so much), multi-tranche mortgage vehicles and special purpose entities are not derivatives - there is no net settlement. They are pass-through securities. They went bust due to massive defaults of the underlying mortgages loans.

They went bust due to massive defaults of the underlying mortgages loans.

You could say that. But it might be more accurate to say they went bust because the holders badly misjudged the credit quality of those mortgages and took on way too much leverage.

In other words, the financial industry displayed massive incompetence. I'm surprised they managed to get their paychecks deposited in the bank.

"The opposition to putting the Reagan Library at Hoover and Stanford came from NIMBY considerations, not ideology."

Stanford has such a cramped campus -- only 12 square miles in the heart of Silicon Valley -- that they couldn't expand their freshman class for several decades. So you could hardly expect Stanford to somehow squeeze in a library -- plus a parking lot! -- on their campus.

Well, if it had 2000 low cost 1200 square foot apartments for student housing, eg married students plus low singles stacking up 4-6 beds, it would be a perfect fit. The library could be on the bottom two floors and the basement and subbasement. The parking could be under the playing fields surrounding the library.

Why was he opposed to the digging of a second Panama canal?

What's SST?

An old word for a waste of government resources as noted by many commenters here, the Concorde was a SST - that is, a supersonic transport.

5. His advice for Larry Summers [his nephew]: “Err on the side of too much regulation.”

I wonder what the reason behind this is. If the market is efficient, then regulations are irrelevant. But if markets are inefficient, then regulations can do a lot of good and little bad?

True.

There were plenty of regulations in the run-up to the 2008 catastrophe.

What still are needed are stringent criminal statutes and sentencing guidelines laws that entail real jail time for banking criminals. It works for the Swiss.

#3. I never heard Craig lecture but have read his books which are masterfully written.

The only time I saw Arrow speak, he responded to someone invoking the "Infant Industry" argument by quipping, "The problem with protected infant industries is they become senile."

The book, _The Changing Face of Economics: Conversations with Cutting Edge Economists, by David Colander, Richard Holt, and me, 2004, University of Michigan Press, contains an interesting and widely quoted interview with Ken.

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