Global Conference 1999
Wednesday, March 10, 1999
Wed 3/107:00 pm - 10:00 pm
The Global Business and Financial Journalists' Forum
While some excellent reporting has emerged in the financial press in recent times, there also have been notable lapses, such as the failure to predict the Asian financial crisis of 1997, some panelists said.
Part of the reason economic reporting isn't better is what Mortimer Zuckerman, publisher of U.S. News & World Report, called the "financial literacy" factor.
"The public doesn't know much about business, economics and finance, except things that directly affect their lives" he said. "Those of us in journalism understand these limits."
Others agreed that it is difficult to make economics interesting or even understandable to the general public, which affects the quality of reporting, but there are many media - such as The Wall Street Journal, that do excellent work. In general, specialty financial media do a good job, but general-interest media do not, several said.
"Coverage of economics isn't that bad," said Peter Passell, editor-in-chief of The Milken Institute Review. "It's that coverage of economics in broadcast media, in broad-based, mass-market media is bad. If you want specialized economics news, there are plenty of places to get it."
Nigel Holloway, deputy editor of Forbes Global, said economic reporting has come a long way in his more than 20 years as a journalist.
"One of the major changes is how economic journalism has entered the mainstream. It's no longer on the periphery," he said. "And that is simply a reflection of the importance of economics, business and finance to everybody's lives."
Also on the panel were James Glassman, syndicated columnist for the Washington Post; Kenji Hanyu, vice president and director of economic news for the Tokyo Broadcasting System; Hamish McRae, deputy editor of the Independent; and Claudia Rosett, a member of the Wall Street Journal's editorial board. Joel Kurtzman, publisher of The Milken Institute Review, moderated.
Vice President and Director of Economic News, Tokyo Broadcasting System
Deputy Editor, Forbes Global
Deputy Editor, The Independent
Member of the Editorial Board, The Wall Street Journal
Publisher, U.S. News and World Report
Thursday, March 11, 1999
Thu 3/117:30 am - 8:30 am
Keynote Address: Rep. Lee Hamilton
Engagement, not isolation, is the key to getting those governments to make the kinds of reforms we want, he said.
"When we have major differences with a country, the best way to deal with that is through engagement," said Hamilton, who recently retired after 34 years in the House of Representatives. "It works better than isolation. So with countries like China, Cuba and even Iran, my view is we're better off to engage rather than isolate."
While arguing for engagement with some of these problem countries, Hamilton said he has finally concluded there is one region where the U.S. should disengage -- Bosnia and Kosovo.
"I have come to the view that the final status of Kosovo is quite intractable," he said. "It appears to me that we are in Bosnia and Kosovo for a very long time. We need to think more seriously about what we always talk about -- and that's an exit strategy.
"I know it is not easy to withdraw from the Balkans. I know that it cannot be done quickly. But we need to put in place a disengagement policy over a period of years which will turn more and more responsibility over to the Europeans."
Hamilton also said the United States must resist the temptation to act unilaterally around the globe -- something many in Congress seem to want to do.
"We have to work with our friends and allies. That may not sound like that controversial a statement, but believe me, it is," he said. "If you look at the United States Congress today, you cannot help but be impressed with the unilateral tendencies in that body.
Hamilton, now director of the Woodrow Wilson International Center for Scholars in Washington, D.C., spent much of his talk on China and Russia -- two countries of "vital interest" to the U.S.
He said America's relationship with China is at a critical point, as Congress' criticism grows on issues ranging from human rights to the trade deficit. The United States must realize that reform in China and Russia will take many years, and may not always be to our liking.
But, he added, it is in the best interest of the U.S. to continue to engage these countries, not try and isolate them.
"We're going to need large measures of patience and persistence and understanding, building bridges where possible, objecting strongly where necessary, and always, always supporting reform."
Thu 3/118:30 am - 10:15 am
Global Overview and the United States
Some of those challenges can be overcome using models that have succeeded in the American economy, a panel suggested.
For the developed world, one of the most pressing issues is the high number of older workers on the verge of retirement. While the debate over Social Security has taken center stage in the United States, the situation is even more critical in Europe, said Klaus Friedrich, general manager and chief economist at Germany's Dresdner Bank.
The proportion of workers to retirees will approach 1 to 1 by 2030, severely straining government resources. "We're promising services that no government can provide," he said. "We need to get on the ball and make some changes."
European governments should turn to self-funded 401(k)-style programs that will turn workers into shareholders, Friedrich suggested. "In Europe, shareholders are considered fat cats," he said. "It's high time we get away from our 'pay as you go' system."
In Asia, a "massive overshoot" of capital that created a bubble that eventually burst will continue to plague the region, said Bill Wilby, director of global equities at Oppenheimer Funds. "I think the Asian problem will be with us not a year or two but a decade or more," he said.
Japan, struggling to rise from a lengthy recession, needs to shore up its banking system with something akin to the Resolution Trust Corp., which was used to clean up the U.S. savings and loan crisis earlier this decade, said Ronald Hill, partner and director of research at Brown Brothers Harriman & Co.
The story is brighter in Latin America where governments are further along in solving their economic problems, Wilby said. "I anticipate much more regional growth in Latin America over the next 20 years than in Asia," he said.
Also on the panel were Bill Frey, senior fellow at the Milken Institute, and Joseph Minarik, chief economist of the U.S. Office of Management and Budget.
Senior Fellow, Milken Institute
General Manager and Chief Economist, Dresdner Bank
Partner and Director of Research, Brown Brothers Harriman & Co.
Chief Economist, Office of Management and Budget, The White House
Head, Global Corporate Finance, Deloitte and Touche, LLP
Director of Global Equities, Oppenheimer Funds
Thu 3/1110:15 am - 12:00 pm
Japan and East Asia
"The sense that East Asia is in recovery is actually a sense that the free-fall has landed on a ledge," said Linda Tsao-Yang, managing director of the Asian Development Bank. How precarious those ledges are varies from country to country, she added, acknowledging South Korea as having the firmest footing and Indonesia as having the most severe problems.
Recovery in countries such as Indonesia will only come following major structural reforms, including improved judicial systems, more transparent securities rules and the end of "crony capitalism" -- the process that provides free reign to a group of wealthy and well-connected families.
Most panelists said those changes must be propelled from within the struggling countries rather than from outside agencies which often have the effect of masking problems and actually delaying real reform.
"I'd much rather have people have to live with their mistakes," said Nicholas Brooke, chairman of consulting firm Brooke International. "I'm against intervention."
But Tsao-Yang warned that greater instability and far worse suffering could result without any outside help. She noted, for example, how the Asian Development Bank has arranged assistance she considers appropriate, such as funds to pay for children's education and nutrition. "Don't throw the baby out with the bath water," she said.
Panelists also expressed doubt about the ability of countries to protect their currencies by "pegging" them to other currencies. The ability of the Hong Kong dollar to remain pegged to the U.S. dollar has been a source of much recent debate in financial circles.
"Certain circumstances can almost guarantee that some pegs will be broken," said Milken Institute senior fellow R. Dan Brumbaugh, citing poor underlying fundamentals that lead to a devaluation.
Thu 3/111:00 pm - 2:00 pm
Keynote Address: Michael Milken
At the same time, the concentrated ownership of real and financial assets in many developing countries, combined with a lack of market transparency and such incentive structures as well-developed property rights, is one of the primary threats to global economic development.
Milken pointed out that we already know much about the future:
- We know that certain types of disease that are related to age will increase.
- We know that there will not be enough young workers in developed countries to support those in retirement.
- We know that too many young workers will be without jobs in many developing countries.
- We know that the varying dependency ratios are starting to create two very different worlds. Exacerbating the problem is the concentration of wealth and control of financial assets in many developing countries.
The key to progress around the world starts with the introduction of financial technologies that will make capital available to a much broader range of entrepreneurial businesses; then, the democratization of knowledge; and, finally, broadly dispersed advanced health care, Milken said.
Like an artist mixing colors, public policy leaders must blend many tools and sources of knowledge to attack global problems effectively.
"A lot of times when I talk to a scientist, he tells me, 'This is really an art, not a science.' I would suggest to you financial technology is just as much an art," said Milken. "Used properly, (these technologies) energize companies, they energize economies, they energize states and countries."
Because of rapidly changing technology, we need lifelong learning, he said. But education is expensive. New technologies, such as distance learning and adaptive learning engines can help.
Technology can also drive major progress against diseases. We will soon unlock the human genome. Now we are about to reveal five billion years of evolution in a single cell.
Medical advances will be a major story in the next century. Those companies that are able to use technology to cure major diseases such as cancer will be the most valuable businesses.
"Those companies that solve the problems of the 21st century, just as they have in the last century, will accrue enormous value," Milken said.
Not only will it increase the value of these companies, but curing such problems as heart disease and cancer will greatly add to the value of the country, Milken said.
"Increases in life expectancy due to medical technology between 1970 and 1990 have caused an increase in value of close to $58 trillion," he pointed out.
We have the tools, he said, to bring education and better health care to the entire world.
Thu 3/112:00 pm - 3:00 pm
Euroland and the Euro
The British are part of the European Union but balked at abandoning the pound for the Euro under previous Conservative Party rule. Labour Party Prime Minister Tony Blair has indicated that his government is more receptive to the new currency.
"The continent would welcome the British as early as possible," said Bernd Stecher, senior vice president and chief economist of Germany's Siemens AG. "We'd like to share the British entrepreneurial spirit with the rest of the community."
Spurred by a strong service sector, British unemployment is about 6 percent -- approximately half the level of some other European nations. Some analysts said Britain's more liberal labor rules as well as privatization efforts could rub off elsewhere in Europe.
"Europe's main economic policy challenge is unemployment," said Joly Dixon, director of international economic and financial affairs for the European Commission. "Many European countries have unemployment of over 10 percent -- this is unacceptable."
Dixon predicted that economic growth for the European Union will total about 2 percent this year before picking up in 2000. Earlier predictions had pegged 1999 growth at 2.5 percent.
A wild card in the employment picture is how an expected rush of corporate combinations will affect jobs. "We will see a wave of mergers in coming months" as the Euro conquers borders and deregulation continues in industries such as telecommunications, said Juergen Mueller, senior economist at DaimlerChrysler AG.
Panelists said closer cooperation between European Union nations will make national governments less relevant. They also suggested that the advent of the Euro will carve into the dollar's supremacy as the world's currency.
"There is a revolution going on in Europe; we're just in the early stages of it," said Richard M. Young, managing director and chief European strategist for Goldman Sachs.
A dissenting voice on the panel was Henri Lepage, managing director of l'Institut Euro '92, who suggested that the currency won't be as strong as some panelists suspect, and that the common currency may not have the effect of drawing the nations together.
"The Euro will be much weaker than people think," Lepage said. "Life will much tougher than people think and divisions between countries much greater than people think."
Ted Van Dyk, executive vice president of the Institute, moderated.
Director, International Economic and Financial Affairs, European Commission
Managing Director, l'Institut Euro '92
Senior Economist, DaimlerChrysler AG
Senior Vice President, Chief Economist, Siemens
Richard M. "Mike" Young
Managing Director and Chief European Strategy, Goldman Sachs
Thu 3/113:00 pm - 4:15 pm
Public Policy and the Policy Makers
"I think it's done more damage than good," said Gary Becker, economics professor at the University of Chicago and the winner of the 1992 Nobel prize for economics. He called the IMF a "political institution that has difficulty taking tough political action." Becker suggested that the organization should go out of business, pointing to what he termed IMF failures in Russia and Brazil as evidence of its shortcomings.
Becker and other critics of the IMF charge that the organization prevents genuine reforms by propping up countries guilty of financial policy blunders. But officials from countries on the receiving end of IMF aid saw it from a different perspective.
"I wouldn't want to see the IMF taken out because it doesn't succeed in every occasion," said William Birch, Treasurer of New Zealand, which received IMF assistance earlier this decade. He called the IMF successful as a reform advocate.
Paulo Ferraz, president of Banco Bozano Simonsen S.A. in Brazil, also defended the organization. "The IMF is not a perfect institution, but at the end of the day it's done more good than bad," he said. "It's better to have the IMF than nothing." Brazil has received IMF aid to help it out of its current financial crisis that has left the country mired in recession.
Controversy is nothing new to the fund, said Richard Erb, the IMF's former deputy managing director. "Criticism goes with the job," he said. Erb compared the IMF to an emergency room doctor acting at the site of an accident. "There are no time for studies; you have to make decisions."
Vijit Supinit, a senator of Thailand and former governor of the Bank of Thailand, also defended the organization. "The IMF has done a very vital job to stop the bleeding" in his country, he said.
Alec Levenson, economist and acting director of Labor Markets and Human Capital Studies at the Milken Institute, rounded out the panel. Milken Institute President Donald Straszheim moderated.
Treasurer, New Zealand
Former Deputy Managing Director, International Monetary Fund
Economist and Acting Director, Labor Markets and Human Capital Studies, Milken Institute
Senator and Former Governor, Bank of Thailand
Thu 3/114:15 pm - 5:45 pm
China and Taiwan
China's massive state-owned industrial enterprise has begun to shrink as private enterprise plays a larger role in the country's economy, said Nicholas Lardy, senior fellow at the Brookings Institution. "The biggest challenge is how to shrink it further," he said.
State-owned companies are not only less efficient than their private counterparts but also receive a disproportionate share of bank financing, limiting the growth opportunities for smaller, private firms, Lardy said. "The thing to watch for future success is whether the banking system transfers itself to the non-state sector," he added.
China's per capita income doubled from 1978 to 1987 and then doubled again during the next decade. Various estimates suggest that growth rate has slowed or stalled altogether during the past year.
The head of one of China's banks said changes have been put in place to invigorate the economy. "There are reforms underway in banking as well as in other areas such as agricultural distribution," said Zhou Xiaochuan, president of China Construction Bank. "But I agree we need more restructuring."
Chinese economic growth could also be aided by splitting off the municipal functions that many large companies are responsible for, such as the operation of schools and hospitals, said Merton Miller, a Nobel Laureate and economic professor at the University of Chicago. Unleashing companies from those responsibilities would make them more attractive for investment, he said.
But any moves to dismantle state-run enterprises are likely to be limited by China's growing struggles with joblessness. Officially, China's unemployment rate is less than 4 percent, "but the real unemployment situation is very grim," said Minxin Pei, senior associate at the Carnegie Endowment for International Peace.
Zhou Yupeng, vice mayor of the Shanghai Municipal People's Government, also participated on the panel. Perry Wong, a research associate at the Institute, moderated.
Senior Fellow (Foreign Policy Studies), The Brookings Institution
Senior Associate, Carnegie Endowment for International Peace
President and CEO, China Construction Bank
Vice Mayor, Shanghai Municipal People's Government
Thu 3/117:00 pm - 10:00 pm
Russia and the CIS
A divided panel of Russian experts found little consensus on why that country's reforms failed so miserably or what lies ahead in its troubled future. But they did agree that Russia's present is remarkably bleak with widespread corruption, thousands of nuclear weapons in potentially dangerous hands and the threat of national disintegration.
There was little agreement on how Russia drifted into its dismal state throughout a contentious - and lively - discussion.
Andrei Illarionov, director of Institute of Economic Analysis in Moscow, charged that reforms were, in fact, a charade to which the International Monetary Fund turned a blind eye.
"In the last seven years, there have been no market reforms in Russia," he charged. "It was the same policy as (in the former) Soviet Union."
Those policies included a bloated bureaucracy, huge budget deficits and an unrealistic ruble exchange rate -- each of which doomed any chance for a transition to a real market economy, Illarionov said.
But Boris Berezovsky, executive secretary of the Commonwealth of Independent States, suggested that the reforms were an honest attempt that simply fell short due to other reasons, including a criminal environment that throttled the efforts before they gained a toehold.
Illarionov was not the only one to lay part of Russia's problems at the IMF's doorstep. Dimitri Simes, president of the Nixon Center, charged that Boris Yeltsin's 1996 election victory was "stolen" using cash siphoned from IMF aid packages. "We have to ask ourselves what we were smoking," Simes said. "What did people in the White House know and when did they know it?"
Looking forward, the panelists found little reason for optimism.
Stephen Kotkin, director of Russian studies at Princeton University, offered the grim potential of another Chernobyl nuclear disaster or a doomsday scenario involving nuclear or biological weapons left over from the Soviet era. He also provided little hope of political reforms.
"We're going to see more of the same," he said. "A gigantic sprawling bureaucracy that has no time to collect taxes because it's busy from 8 a.m. to midnight collecting bribes."
Berezovsky, an influential businessman under fire from Russian President Boris Yeltsin, who called for his ouster as head of the CIS, held out the possibility of geographic disintegration. "The main problem for Russia is the same as the Soviet Union, the question of 'will Russia collapse.'" He called that proposition extremely dangerous for the rest of the world.
Simes suggested that the best thing for the beleaguered country would be a leader who could provide a sense of law and order, alluding to Prime Minister Yevgeny Primakov. "In the short term, our fundamental interest in Russia is a modicum of political stability," he said.
But others, such as Illarionov, scoffed at that suggestion, comparing Primakov to former Chilean strongman Augusto Pinochet.
The panel was rounded out by Marshall Goldman, associate director of Russian Research Center at Harvard University and Louise Shelley, director of the Center for Transnational Crime at American University. Peter Passell, editor of The Milken Institute Review, moderated.
Executive Secretary, Commonwealth of Independent States
President, Eurasia Group and Eurasia Project
Professor, Associate Director Russian Research Center, Harvard University
Director, Institute of Economic Analysis
Associate Professor, Director, Ptrogram in Russian Studies, Princeton University
Professor (Justice, Law and Society), Director, Center for the Study of Transnational Crime, American University
President, The Nixon Center
Friday, March 12, 1999
Fri 3/127:30 am - 9:15 am
Financial Reform, Banking, and the Financial Sector
"The rule of law is crucial," said Lincoln Anderson, a consultant on international finance and economics, as he laid out a list of reforms -- including respect for contracts and property laws along with more revealing financial reporting -- to inject confidence in foreign financial systems. "You can't expect markets to function without the rule of law."
He also suggested that state-provided deposit insurance leads to irresponsible moves by lenders by removing market discipline.
A greater emphasis on capital markets rather than state-influenced banks to provide corporate financing is likely to lead to more revealing financial reporting, suggested Joseph Bisignano, head of research for the Bank for International Settlements.
Investors will demand financial statements and other information to value stocks and bonds, reducing the secrecy and, in some cases, the corruption that have led to financial collapses in Asia and elsewhere.
In addition, the cozy relationships many banks enjoy with governments or major stockholders who become borrowers needs to be eliminated, said Diane Glossman, managing director and banking analyst at Lehman Brothers. "They need regulators who know what to look for and...arms-length arrangements with shareholders," she said.
Otherwise, these cozy relationships can turn banks into institutions that merely "convert savings into non-performing loans," said Uwe Parpart, senior director of Commercial Intelligence, an international law and consulting firm.
Despite the Asian crises that have cost many investors dearly and drawn attention to the need for reform, the message is not resonating with all investors, said Stan Watt, managing partner of Arthur Andersen's Asia/Pacific financial services practice.
"When I talk to investors (in the Asian market), they rarely ask for transparency or (standardized) financial statements," Watt said. "They just want in."
Also featured on the panel were James Barth, senior fellow at the Milken Institute and Gary Schieneman, managing director at Merrill Lynch. Milken Institute Director of Capital Studies Glenn Yago moderated.
Chief Economist (retired), Fidelity Investments
Senior Finance Fellow, Milken Institute
Head of Research, Bank for International Settlements
Managing Director, Analyst (Banking), Lehman Brothers
Senior Director, Commercial Intelligence
Managing Director, Analyst (Global Equities), Merrill Lynch
Managing Partner, Asia/Pacific Financial Services Practice, Arthur Andersen
Fri 3/129:15 am - 10:00 am
California in the Global Economy Address: California Gov. Gray Davis
"Our economic strength depends on the promise of a quality education for every child," Davis said. "I have said that my first, second and third priority is restoring our public schools to greatness."
Davis cited recent results of the National Assessment of Educational Progress tests that showed California students almost dead last in every category. "This is unacceptable."
Davis has proposed a four-part package of education reform initiatives that he calls READ -- Raising Expectations, Achievement, and Development in Schools. Its points are:
- A comprehensive program designed to achieve the goal of full literacy by the third grade.
- Peer review for teachers and intensive training in reading instruction.
- Hold schools accountable by encouraging them to improve performance by 5 percent over the previous year.
- A rigorous high school exit exam that students must pass as a condition of graduation.
"It's high time that a diploma from this state means something to parents, students and prospective employers," Davis said. "I believe to my core that if we have the courage to challenge our youngsters, our youngsters will rise to meet the challenge."
Aside from the problems with education, the state's outlook is very positive, the governor said. Unemployment has dropped to 5.7 percent -- down from 6 percent a year ago. The number of employed Californians increased by almost 300,000 from January 1998.
"We remain the world's standard-bearer for job growth in the New Economy, and hopefully will stay there," he said.
To do that, in addition to improving education, the state must also improve its infrastructure, strengthen its international trading relationships and promote entrepreneurial activity and research and development, he said.
He mentioned the recent decision of TelMex, the Mexican telecommunications company, to open a plant in San Diego -- bringing 500 jobs to the area -- as an example of what improved relations with Mexico can accomplish.
"When you put all these pieces together, I think you have a package for a very exciting future for California," Davis said. "If we work hard and work together, California will be the global leader."
Fri 3/1210:00 am - 11:15 am
Brazil and Latin America
"Latin America is in trouble again," said Abraham Lowenthal, a professor at the University of Southern California and president of the Pacific Council on International Policy. He placed South America's largest country on top of the problem list.
"Brazil faces negative growth, a deep recession and the possibility of a depression," he said.
Other countries in the region face headaches of their own, Lowenthal said. Argentina counts on Brazil for 40 percent of its exports and so is in danger of being pulled down by its neighbor. Chile, which looks to the Far East for trade, has been hurt by the Asian crisis. Venezuela is struggling to overcome falling oil prices as well as corruption and mismanagement. Central American nations, meanwhile, must contend with the aftermath of Hurricane Mitch.
Further north, the news is more encouraging. Employment and exports are growing in Mexico where fiscal deficits are low, said Jonathan Heath, senior correspondent of the publication Reforma. "Mexico looks north, not south," said Heath, explaining Mexico's fortunes compared to other Latin American countries.
But even Mexico faces hurdles. Most notable among them is getting through the 2000 election season without a financial crisis, Heath said. Monetary problems, such as currency devaluations, have traditionally occurred in election years, prompting some investors to pull out of the Mexican market in advance of the occasion. Next year's election promises to be extremely competitive as three parties have a realistic chance of winning, he said.
Paulo Ferraz, president of Banco Bozano, Simonsen S.A., meanwhile, was one of the few panelists among the conference participants to take a stand for the work of the International Monetary Fund which is assisting Brazil. "The IMF is not a perfect institution," he said. "But it's better to have the IMF than not to have it."
Nancy Birdsall, senior fellow at the Carnegie Endowment for International Peace, Paulo Rabello de Castro, president of SR Rating, and William Hayes, managing director for Latin America for Duff, Phelps Credit Rating Co., were also on the panel. Washington Post columnist James Glassman moderated.
Senior Fellow, Carnegie Endowment for International Peace
Paulo Rabello de Castro
President, SR Rating
Managing Director for Latin America, Duff and Phelps Credit Rating Co.
Senior Correspondent, Reforma
Professor, University of Southern California, President, Pacific Council on International Policy
Fri 3/1211:30 am - 1:00 pm
Michael Milken and the Nobel Laureates
During a 90-minute discussion moderated by Institute Chairman Michael Milken, the Nobel Prize winners debated why some societies - such as the United States - have done so much better than others - such as those in Latin America or Africa.
The answer, several said, is having political and economic systems that allow a country's citizens to realize their potential.
"There's a delicate interdependence between the incentive structure provided in the society and the effectiveness with which you use that human capital," said Gary Becker, a professor at the University of Chicago and winner of the 1992 Nobel Prize. "There's human capital, there's social capital, there's financial capital. Each alone cannot be effective. Each operating without the right economic environment - markets, private incentives - will not be very effective. You need this delicate interdependence."
He pointed to the fact that Russia has a highly educated people, but not the market structure to take advantage of that human capital.
Milken asked why some countries are able to create these needed incentives while others are not.
Douglass North, a professor at Washington University in St. Louis and winner of the 1993 Nobel Prize, said history is a big factor. In Latin America, for example, Spain left a political structure designed mainly to maximize revenues for the state. In North America, on the other hand, the political system began with a much more solid foundation - one based on self government and freedom.
"History matters in a big way," said North. "It matters because it set the scene which still today has long-term implications for the relative success of North America versus the lack of success in Latin America."
Becker politely disagreed.
"History counts, but history isn't complete determinism," he said. "The problems in Latin America and in Africa have been created by themselves."
The four panel members - who included Merton Miller of the University of Chicago, and winner of the 1990 Nobel Prize, and Myron Scholes of Stanford University, and the 1997 winner - also discussed population trends. Some wondered how developed nations, which tend to have older populations, will deal with problems such as the cost of Social Security and health care, and the high rate of poverty among children in the U.S.
And they debated the cost of higher education, which has risen substantially in the United States in recent decades. Becker argued that while the cost has gone up, the rate of return has risen dramatically as well (i.e. better-paying jobs) - far outweighing the costs.
1993 Nobel Laureate - Economics, Professor, Washington University in St. Louis
1997 Nobel Laureate - Economics, Professor Emeritus, Stanford University