Thomas Cooley: Will Big Government Change The Rules Of Commerce?
Thomas F. Cooley is the Richard R. West Dean and the Paganelli-Bull Professor of Economics at New York University Stern School of Business, as well as a Professor of Economics in the NYU Faculty of Arts and Science. He was appointed Dean of NYU Stern in 2002.
The former President of the Society for Economic Dynamics and a Fellow of the Econometric Society, Dean Cooley has received numerous awards for his teaching and is recognized as a national leader in both macroeconomic theory and business education. He is a widely published scholar in the areas of macroeconomic theory, monetary theory and policy and the financial behavior of firms.
Before joining NYU Stern, Dean Cooley was a Professor of Economics at the University of Rochester, University of Pennsylvania, and UC Santa Barbara. Prior to his academic career, Dean Cooley was a systems engineer for IBM Corporation. Dean Cooley received his BS from Rensselaer Polytechnic Institute, and his MA and PhD from the University of Pennsylvania. He also holds a doctorem honoris causa from the Stockholm School of Economics.
Topic: Thomas Cooley on Problems and Solutions in an Era of Big Government
Cooley: I’m Thomas Cooley. I’m the Dean of the Stern School of Business at New York University. I’m also a professor of economics.
Question: What is the greatest lesson of the financial crisis?
Cooley: How you think about responding to a crisis once you’re in it. So the… the issue is once you’re in a crisis, how do you… how do you fix the system, how do you deal with a crisis without simply creating the seeds of the next crisis. And that requires a little more thoughtful approach than I think we’ve seen in response to the financial crisis over the past year and a half. One of the things that we argue is that some of the things they’ve done have just sown the seeds of further problems. One example, just to take one example, is the large scale intervention of the Fed and the treasury in trying to [prop] up institutions that they deemed to be too big to fail. And that just postpones a problem, it doesn’t solve the problem.
Question: So the government is making the economy worse?
Cooley: As soon as you say that an institution is too big to fail, then that’s a promise to not let it fail. That’s insurance. And they should be required to pay for that insurance. Otherwise, there’s an incentive, actually, to be thought of as being too big to fail or too interconnected to fail. Another example would be the Federal Deposit Insurance Corporation, that’s really… it has always been a fine institution in that. It provides deposit insurance. It eliminates uncertainty about whether or not [deposit] in commercial banks will get their money back. And it does that by charging the banks for the insurance so the people who create the risk pay for the risk. But when that changes, when you shift that risk to the public, which is something that I believe has been happening more recently with the FDIC, then you’re saying, well… you know, we’re not going to charge the institutions that create this risk. For creating it, we’re going to shift that cost to the public. And that just sows the seeds of more problems further on.
Question: How will the financial sector shake out?
Cooley: As we acknowledge that some of these institutions are too big to fail and create too much systemic risk by their size and interconnectedness, then they’re going to be more heavily regulated. And overtime, as they… as they get more heavily regulated, you know, my analogy is they’ll be like the utility companies were in the 1960s and ‘70s, the AT&Ts of the 1960s. Once that… As that pressure grows to regulate them more, they will find in their interest to break off parts of their business. So I actually think we’ll see an evolution towards many more medium-size firms and firms that are focused in particular areas. I think the… sort of the viability of the financial supermarket model is probably in question.
Question: How would you change the U.S. tax code?
Cooley: We’re looking at potentially, really staggering increases in tax rates. And if you look at a person who lives and works in New York, who are looking at higher city taxes, higher state taxes… Many state governments have dug themselves into the big fiscal holes. And then, clearly, people earning over… what in New York might seem like a fairly modest salary are going to be facing higher federal taxes as well. So the tax burden on Americans is going to increase enormously in response to this crisis. And… You know, I think there’re… That one of the things we have to face up to is how we deal with the problems that that’s going to create because that’s going to have… dealing with that is going to have a dampening effect on our economic future. One of the… One of the biggest problems facing state in local governments are their pension obligations. And we’re going to face much higher taxes because of that. So we haven’t begun to… we haven’t even begun to talk about those issues publicly maybe because they’re too scary to talk about. The good thing about flat tax is… And I don’t… I don’t sort of necessarily endorse the simplest version of flat tax. But I do think that the… the good thing about flat taxes is that they tax consumption and not investment behavior. And that’s the part of it that one would like to preserve. I certainly agree that the tax system should be progressive in some way, but a flat tax can be progressive in the right way. And, I think that one of the problems with the existing tax code is it’s so complicated and it taxes a lot of the wrong things.
Question: What are the best avenues for stimulus dollars?
Cooley: I think the size of the stimulus package is so huge it’s hard to… it’s hard to think about how you use it most efficiently. But my perspective as an economists says that the things that we now pay off really well in the long run are investments in education, investments in science and technology education, investments in research that lead to longer term benefits that can pay off. There’s actually a lot of research on the effects of early childhood education. That educating children in their pre-school years, particularly children who are at risk, is enormously helpful. That children can succeed in school unless their brains develop at an early age. And early childhood education has the potential to address that. So those are the kinds of things that at least have the possibility to pay benefits over the long-term that can be realized by the future generations. You’re going to have to pay the enormous bill for this stimulus package.
Dean of the NYU Stern School of Business, Thomas Cooley, on how to navigate an expansive, global regulatory environment.
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The results of this study showed depressive symptoms being highest in adolescence, declining in early adulthood and then climbing back up again into one's early 30s.
- A 2020 Michigan State University study examined the link between teen social networks and the levels of depression later in life.
- This study used data from the National Longitudinal Study of Adolescent to Adult Health, specifically targeting social network data. The results showed depressive symptoms being highest in adolescence and declining in early adulthood, then climbing back up again into one's early 30s.
- There are several ways you can attempt to stay active and socially connected while battling depression, according to experts.
The study suggested that teenagers who have a smaller social circle showed higher rated of depression later on in life.
Credit: asiandelight/Shutterstock<p><a href="https://www.eurekalert.org/pub_releases/2020-09/msu-tsn093020.php" target="_blank" rel="noopener noreferrer">A 2020 Michigan State University study</a> examined the link between teen social networks and the levels of depression later in life. The results of this study suggested teens who have a larger number of friends in adolescent years may be less likely to suffer from depression later in life. These findings were especially prominent in women.</p><p>This study used data from the National Longitudinal Study of Adolescent to Adult Health, specifically targeting social network data. This data asks students to select up to 5 male and 5 female friends and indicate how often they felt depressive symptoms. </p><p>MSU Sociology Assistant Professor Molly Copeland and lead author Christina Kamis (Sociology doctoral candidate at Duke University) published the study in the Journal of Health and Social Behavior in September. </p><p><strong>Female teenagers may struggle more with depression during their teen years but show fewer depressive symptoms later in life.</strong> </p><p>For female adolescents, popularity can lead to increased depression during their teen years. However, this ultimately may lead to lasting benefits of fewer depressive symptoms later in life. "Adolescence (is) a sensitive period of early life when structural facets of social relationships can have lasting mental health consequences," Copeland wrote, adding that "compared to boys, girls face additional risks from how others view their social position in adolescence."</p><p>Throughout this study, men showed no association between popularity and depressive symptoms, however, they did show benefits from naming more friends. As for why this is, Copeland has a theory: perhaps the expectations on young girls (compared to young boys) as well as the roles that lead to popularity can create a kind of stress and strain felt more prominently by girls than boys. </p><p>While this does create more difficult teen years for young girls, the stress and strain may lead to giving these girls a psychological skillset that benefits them later in life, allowing them to deal with stressful situations more easily.</p><p>The study also suggested that teenagers who have a smaller social circle showed higher rates of depression later on in life. </p><p><strong>Results from both men and women followed a U-shaped trajectory of depressive symptoms.</strong></p><p>The results showed depressive symptoms being highest in adolescence and declining in early adulthood, then climbing back up again into one's early 30s. This was particularly more noticeable in women, who showed a steeper decline in symptoms between the ages of 18-26, followed by a more rapid increase in symptoms in their early 30s. </p>
How to stay social while battling depression<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDQ1MjA3MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxNDMyNDY1N30.e1ULIJ5QYXh4H1SGUPUTJqYBCnX2XWp6InjPRr-2Bdw/img.jpg?width=1245&coordinates=0%2C22%2C0%2C22&height=700" id="832fd" class="rm-shortcode" data-rm-shortcode-id="b360bb24fb8d6025680bfffb52fd5982" data-rm-shortcode-name="rebelmouse-image" alt="depression support group illustration" />
Attending support groups, planning activities with family or even just a weekly phone call to a friend can help alleviate depression.
Credit: Mascha Tace/Shutterstock<p>Although maintaining relationships can help you cope, it can also be one of the most difficult things to do when you're experiencing depression.</p><p>As Dr. Jennifer L. Payne (an assistant professor/co-director of the Women's Mood Disorders Center at Johns Hopkins Hospital in Baltimore) <a href="https://www.everydayhealth.com/hs/major-depression/staying-socially-active-with-depression/" target="_blank" rel="noopener noreferrer">tells Everyday Health</a>: "One of the common symptoms of depression is social isolation." </p><p>Payne goes on to explain that you can "soak up some energy" by simply being around other people, moving around, and staying active.</p><p><strong>Creating a daily schedule and planning activities ensures action. </strong></p><p>While it may be easy to turn down last-minute plans, it's more difficult to cancel plans you've already committed to with friends and family. While it's important not to overwhelm yourself with a packed schedule, creating a minimal daily schedule that involves seeing friends and family or doing activities that you've previously enjoyed can ensure you stay active and often makes you feel more accomplished at the end of each day. </p><p><strong>Support groups and social networking with people who understand. </strong></p><p>While depression can very easily make you feel isolated and alone, surrounding yourself with others who may be struggling with depression as well can help in multiple ways. You will have peer support from people who relate to how you're feeling plus the added benefit of being around people, which can raise your spirits. </p><p><strong>Keeping a journal (and setting goals) can help you feel accomplished. </strong></p><p>Keep a thought journal and detail certain daily or weekly goals (such as a plan to call a friend on Monday or to visit your local coffee shop for a change of scenery on Thursday). These small, achievable goals not only get you out of the house and/or interacting with others, but they also provide a sense of accomplishment and satisfaction once they are complete. </p><p><strong>Random acts of kindness, such as volunteering, will make you feel good. </strong></p><p><a href="https://bigthink.com/mind-brain/kindness-benefits-james-doty?utm_term=Autofeed&utm_medium=Social&utm_source=Twitter#Echobox=1596517476" target="_self">Being kind is good for your health</a> in many different ways. Doing something nice for others can boost your serotonin levels. Serotonin is a neurotransmitter that is responsible for feelings of satisfaction and well-being. Similar to exercise, kindness, and altruism can also release endorphins, creating a <a href="https://www.quietrev.com/6-science-backed-ways-being-kind-is-good-for-your-health/#:~:text=Kindness%20releases%20feel%2Dgood%20hormones&text=Doing%20nice%20things%20for%20others,as%20a%20%E2%80%9Chelper's%20high.%E2%80%9D" target="_blank" rel="noopener noreferrer">temporary sense of euphoria</a> that can help combat depressive symptoms. </p>
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