Alice Rivlin and the Magic of Economics

I like to tell people that I can teach them the essence of economics in three minutes.  Here is the lesson:

            Our wants exceed our resources so we must make choices.  Each choice means we must give up what we forsake as a second choice.  That forsaken choice represents the opportunity cost.  A good choice yields satisfaction.  A bad choice does not and therefore represents a poor use of scare resources.  Economics is the science of choice making. 

            That is economics.  Now, don’t get me wrong.  Economics is a mathematical science.  You quantify all that choice making.  This quantification involves more Greek letters and obtuse symbols than a wall of graffiti.  Learning the details of that mathematical analysis takes several years of intense study, but the essence of economics is as I portrayed it.  Choice making.

            In 1977 I had a choice to make.  I needed money and an organization called The Joint Council for Economics offered me a chance to study economics, write curriculum and get paid for it.  It meant farming out my young girls to their grandparents for a month, and that hurt.  But the money was good.  I applied and was accepted.

            Economics and I turned out to be a natural match. Fast forward a few years and I had been selected for a full-ride scholarship with stipend for a master’s in economics, paid for by the Joint Council for Economics.  I helped put my girls through college by taking a second job, teaching macro-economics at night at the community college.   

            Clearly, I had chosen well, but I would not have even known what economics was, had it not been for a great lady, Alice Rivlin, who died on Tuesday, May 14, 2019. 

            Serving three Presidents, founder of the Congressional Budget Office, head of the OMB and Vice Chair of the Federal Reserve Board, Alice Rivlin was a key player in forming this nation’s economic policy.

             Rivlin came to economics with a sterling, Ivy League pedigree, tainted by the incipient sexism of the ‘50’s.  She earned her PhD in economics from Radcliffe College in 1958.  She was rejected for Harvard’s school of public administration because they feared that admitting a woman who might soon be married was a “poor risk.”  [What, none of their men ever marry?]  Rivlin joined the Brookings Institute in 1957 and that think tank became her home for the rest of her working life, excepting the occasional foray into public service.

            Alice Rivlin was a realist.  I first saw her giving testimony to a Senate committee schooling President Kennedy on the folly of trying to increase domestic spending at the same time you expand the war in Viet Nam.  I had an immediate girl crush on this small woman, pushing a mop of dark hair out of her eyes while leaning on one elbow and dosing out truth to the men in the room.  Kennedy, of course, only saw women as good for one thing and that did not include a brain.  He ignored her, but she was right.

            Part of her realism included strong bipartisan approaches to policy.  She knew you only get cooperation when everyone has skin in the game.  “Programs that affect people’s lives so intimately,” she once wrote, “must flow from a broad bipartisan consensus.”

            She was smart.  She was savvy.  She was fearless and decided to be good, even prescient, in a field that had been dominated by men since Adam Smith wrote The Wealth of Nations. Her example is one I keep before me always.

            Alice Rivlin kept the faith.