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UH-Manoa Economics: A Brief Modern History, 1962-2006
III : A New Home, New Colleagues, ... and No New Funding: 1975-1984

In 1974, the Department moved from cramped Spalding Hall to a brand new seven-story air-conditioned office and classroom tower, Porteus Hall (renamed Saunders Hall after the mid-1990s discovery that Professor Porteus had been actively involved in groups promoting eugenics), which also became the home of several other social science departments. Each department helped to design the layout of its faculty offices in the final stages of construction, and economics faculty--who had often shared offices in Spalding Hall--expressed initial satisfaction with their new 5th floor home. But before long, they discovered an inconvenient truth: faculty offices in economics were much smaller than those in sociology, geography, and political science, which had double-offices for senior faculty! Hallway talk soon turned to whether some not-too-attentive faculty member in economics had O.K.'d designs during or after a particularly lively department party.

Three signal events in the early 1970s led to declines in the number of faculty positions in UH-Manoa, the College of Arts and Sciences and the UH budget. First, Lt. Governor Tom Gill challenged incumbent Governor John Burns in the Democratic primary for the 1970 gubernatorial nomination. Gill was the favorite of many UH faculty, Burns won, and state government spending on UH stagnated. Perhaps the funding cut was the logical result of the 1970-1971 U.S. recession, which had spilled over to Hawaii's economy and the state's tax revenues; or maybe it was fast punishment meted out by the patriarch of the Democratic Party to his rebellious children, a privileged group that had received his special attention and so many favors. Second and third, the establishment in 1972 of the UH-Manoa John Burns School of Medicine and in 1974 of the UH-Manoa William Richardson School of Law diverted--by some accounts--more than 100 faculty positions from the UH-Manoa College of Arts and Sciences to the new schools. The position cuts came at a particularly bad time for the Department, occurring just as many of the assistant professors hired in 1969-1971 were leaving the University. Other faculty--Gary Walton and Bertrand Renaud--had already left Hawaii, attracted by visions of greener pastures at Indiana University and the OECD, respectively. By 1982, only 7 of the 21 new economics faculty hired in 1969-1971 were still with the Department. The bleeding continued when H. Robert Heller, one of the more well known members of the Department, left in 1976, lured by the considerably higher salaries paid senior management by the Bank of America, at that time a bank securely moored in San Francisco. In 1986, President Reagan would appoint Bob to the Board of Governors of the Federal Reserve System, a job which he would resign after just three years to return to the good life of Marin County.

UH-Manoa's doctoral program in economics graduated its first student, Sukhdev Shah, in Fall 1973. His dissertation, Money in Nepal: An Analysis of the Growth and Fluctuations in the Nepalese Money Stock, 1957-1972, was the first dissertation and the first of many dissertations to analyze Asian money supplies. Most graduate students in the first few entering classes were from East and South Asia. Many would return to their home countries to embark on truly spectacular careers in business, government, and academia in their home countries or at international organizations such as the Asian Development Bank, the World Bank, or the International Monetary Fund. Among the first graduate students was Chatt Wright, who would become the President of Hawaii Pacific University. Ae Sil Kim would hold the distinction of being the first woman Ph.D. economist from Korea; she currently serves in the Korea national legislature. Marcia Sakai would become the Dean of the School of Business and Economics at the University of Hawaii-Hilo. Shigeyuki Abe went on to teach at Kyoto University, one of the most prestigious universities in Japan. Yuki and two UH-Manoa economics Ph.D.s (Yumiko Okimoto and Akihiko Kawaura) would abandon posts in prestigious public universities in 2004 to assume positions at a respected private university, Doshisha University in Kyoto, Japan.

Between 1974 and 1979, Burnie Campbell recruited a second group of talented young faculty to bolster the Department's expertise in fields that were critical to the Department's research focus on policy issues in Asian economies and Hawaii's economy. Jim Roumasset (U. Hawaii, MA; U. Wisconsin Ph.D.) arrived with extensive knowledge of rural life in the Philippines, a life-long fascination with contractual arrangements in agriculture, and a theoretical tool kit packed with welfare economics and agency theory, all of which would be profitably absorbed by several generations of graduate students who enrolled in his development economics courses. Andy Mason (Ph.D., U. Michigan) and Linda Martin (Ph.D., Princeton U.) arrived in the mid-1970s as joint appointees with the East-West Center's Population Institute. They advised legions of UH-Manoa students with EWC fellowships from the Population Institute, and (occasionally) found colleagues using such phrases as "demographic transition" in their own research. Ed Fujii (B.A., U. Hawaii; Ph.D., Stanford U.) was delighted to leave Tulane University in 1977 and to return to his home state, initially on a joint appointment in the Department and UH-Manoa's Department of Urban and Regional Planning. Asked by Burnie Campbell to consider refocusing his teaching and research on a new field, labor economics, Ed plunged into his new assignment so vigorously that he quickly became known for his encyclopedic knowledge of the labor economics literature. All of his courses were very popular and unbelievably well organized. Ed would have detailed syllabi, homework assignments, and mid-term and final exams all prepared before classes began. Marcellus Snow (Ph.D., U. California, Berkeley) brought new expertise on econometrics and telecommunications economics. In the early 1980s he presented a paper on economies of scope to a Department seminar and was sharply criticized for inferring too much from a regression with too few degrees of freedom. Noting the problem, he returned 10 years later to present the paper with an extended data set, wryly noting that a little bit of patience had allowed the degrees of freedom problem to be resolved. At retirement, Marcellus and his wife Jo made a generous donation to the Department to refurbish office space for emeriti faculty. Raburn "Mac" Williams (U. Chicago) moved from the UH-Manoa College of Business Administration to the Department in 1978. Mac began teaching courses in monetary economics infused with huge doses of Chicago theory, an endless array of stories from the economic history of the United States (he is the profession's and the world's ONLY unabashed admirer of U.S. President Warren G. Harding), and boundless good humor. Chung Lee (U. California-Berkeley) visited the Department during the 1975-76 academic year and accepted a permanent offer in Spring 1980. His UH-Manoa offer letter stated that he should "develop and foster a cadre of Korean economists in the fields of international and development who would make all important decisions regarding the Korean economy." [OK, that line is a joke; it was not in his offer letter.] One can make a strong case that he accomplished this mission. The large numbers of Korean, Thai, and Philippine graduate students who returned to their home countries to take key jobs in academia and government are still (and perhaps insensitively) referred to in their home countries as the "Hawaii mafia."

The late 1970s and early 1980s saw several professors cross the Pacific Ocean in search of the next big opportunity. Professor Youngil Lim (international trade and development) left in 1981 for a position at the United Nations in Vienna, Austria. A very painful departure occurred when Max Fry (Ph.D., London School of Economics) left for University of California, Irvine, in 1981 because the UH administration refused to respond to Irvine's generous offer. A prolific writer, Max was one of the leading experts on finance and development and had brought tremendous energy to the department's graduate program as its chair. He involved his graduate students in his research projects. Together they estimated money supply functions for just about every Asian nation with accessible data. He was equally comfortable hobnobbing with Central Bank presidents in three-piece suits or socializing with graduate students and colleagues in shorts and rubber slippers (rarely did he wear shoes on campus; if he did you knew he had a business meeting downtown); but he insisted that he bought a new pair of slippers every year. He and wife Celia were accomplished musicians, he on the viola and she on the cello. They played (socially) with members of the Honolulu Symphony. Not to take anything away from Professor Chung Lee's scholarly demeanor and vast worldly knowledge, but the departure of Max and his crisp British accent materially diminished the Department's ties to the ancient academic traditions of English universities. As much as he loved Hawaii, he never got used to eating the local steamed rice, which he called "the glutinous stuff." With his offer from UC-Irvine left unopened by the UH administration, Max became a symbol in the Department for growing administrative indifference toward productive economics faculty at the start of the 1980s.

For almost two decades after his 1970 arrival, Moheb "Mo" Ghali (Ph.D. U. Washington) brilliantly taught the required and sometimes dreaded first-year graduate course in econometrics. Mo confidently produced applied econometric research on Hawaii's economy that was regularly published by reputable university presses and the leading economics journals. He was one of the most prolific publishers in the Department and continued to publish even after he became the Associate Dean of Graduate Studies in 1980. In 1993 Mo would flee the rainy, green tropical forests of Manoa valley for the even rainier and greener fir forests of Western Washington University in Bellingham, Washington--an up-and-coming university that children of UH-Manoa economics faculty would pepper with applications--to become its Vice-Provost and Director of Graduate Studies.

Economic growth and housing prices in Hawaii boomed in the late 1970s, but followed the national economy into recession and decline from 1981 to 1983. As usual, declining state tax revenues led Governor George Ariyoshi to cut state appropriations to UH. UH-Manoa Chancellor Durwood Long responded with budget cuts and hiring freezes. The fiscal austerity had a telling effect on the Department and the Campus, as travel funds, seed money, and faculty morale all plunged. In August 1981, Sumner La Croix (Ph.D., U. Washington) arrived in Honolulu to teach microeconomics and industrial organization and was quite surprised to find that he was the only assistant professor in a Department with 19 full-time faculty positions!

In 1983, faculty salaries at all ranks at UH-Manoa were far below their national counterparts. (In 2007, salaries of assistant and associate professors are competitive with national averages, while salaries at the full professor level remain far below national averages.) Combine the double-digit inflation of the late 1970s and early 1980s with stagnant, low salaries, shake, and serve a very combustible drink! An angry faculty voted to strike, and a two-day long strike ensued, with the Department split over the righteousness of the endeavor. At the end of 1984, President Fujio Matsuda resigned, and an energetic and always optimistic Academic Vice President Albert Simone (PhD., MIT), became interim President and then President of UH. Simone was an economist who had previously been Dean of the College of Business Administration at the University of Cincinnati. The UH Board of Regents--tired of the in-fighting between President Matsuda and Chancellor Long--also named Simone to be the UH-Manoa Chancellor. He presided over the largest expansion of the University since the early 1960s, helped win large raises for faculty, and proved to be an excellent politician when in the company of legislators. Simone resigned to become President of Rochester Institute of Technology in 1991--the year in which the Hawaii economy began its decade-long siesta.

IV : Riding Hawaii's Booming Economy: 1984-1992

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