By: Nick Santangelo
There was no other choice, really. When it came to the recipient of the College of Liberal Arts' Economics Department's first Distinguished Alumni Award, everyone knew exactly who should be honored without giving it a second thought.
"When it came time for the committee to select a winner for our first award," said Economics Adjunct Professor Christopher Swann, "it was unanimous that it would be [Dr. Lacy Hunt, CLA '69]. He's a hugely successful business economist and is enormously supportive of the university with his presence and of the Economics Department with funding for our research PhDs. So it is my honor to present to Lacy from the Economics Department alumnus in recognition of outstanding achievement, our first and foremost Distinguished Alumni Award."
Dr. Swann said Dr. Hunt was "like a mythical creature" for him while he was in the PhD program. He recalled that while Dr. Hunt was well-known as Temple University's first-ever Philosophy in Economics PhD student, the running joke was that Dr. Swann was the oldest Economics PhD student on campus. On a more serious note, he called Dr. Hunt "a big influence" both in his academic work and when he got out into the workforce.
How many of you have heard of the term diminishing returns?
Dr. Hunt accepted the award to applause in Ritter Hall's Walk Auditorium the afternoon of Sept. 19. There was no need for Oscar-style music to play him off during his speech. Dr. Hunt was brief, saying his thanks and getting right to the point: "I accept this with as much humility as I possibly can."
Of course, that was after the alumnus had spoken to a crowd of students and professors about his economic theories for over an hour. College of Liberal Arts Dean Richard Deeg introduced Dr. Hunt who opened his presentation by asking "how many of you have heard of the term diminishing returns?" A few hands went up. Most didn't.
"You don't deserve an A in Economics if you don't understand it," said Dr. Hunt, who manages a portfolio of over $4 billion as Chief Economist of Hoisington Investment Mgt. Co. "We won't be able to increase the growth in the standard of living if we don't increase the growth in the economy, and we're already overusing capital in the form of debt."
This set the tone for Dr. Hunt's lecture, which explained how the velocity of money is unstable, despite what he thought way back when he was a Temple student decades ago. At that time, the data that was available was very limited, but by 1983, more sophisticated and longer-tail data was available. And when the velocity spiked, Dr. Hunt had to rethink everything he thought he knew. Now he says there is no "single bullet" or "magic wand" for monetary policy to correct something like the Great Recession. He believes the banks basically thwarted the Fed's efforts to find one after 2008.
"The Federal Reserve is the reason that the global economy now has 80-90 trillion dollars in more debt than it did in 2007," said Dr. Hunt. He sees this as a major problem, even for countries like China that seem to think themselves immune to the problem of diminishing returns created by excess debt since they owe most of that debt only to themselves. Dr. Hunt disagrees with that assessment. While there are many factors in play, he says the velocity of money is being greatly influenced by increasing levels of debt.
I take the data and try to see if the researchers have indeed achieved the results that they said
A student asked Dr. Hunt how and why his views have changed since he left Temple. Again, the distinguished alumnus went back to data: today it's better and economists are better able to manipulate it to help them understand global changes. This led to another question about what Dr. Hunt's day is like. Outside of managing clients and speedreading financial reports he described as "all the same," Dr. Hunt returned to the data one final time and spoke of how he'll continue contributing to the field of economics moving forward.
"I look at the findings of the research that comes out, and I try to replicate them. In other words, I take the data and try to see if the researchers have indeed achieved the results that they said."
The College of Liberal Arts was honored to host Dr. Hunt and congratulates him on his award!