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A Currency for California

California’s fate, male Star Academics, and the double disadvantage of being unemployed in our round-up of professor blogs

Sure enough, several professors blogged on California’s economic woes. The US state, which is the world’s eighth biggest economy, has been hit hard by the economic downturn. Tax revenues are down sharply and the budget deficit for 2010 is set to top $20 billion. California was recently forced to issue $3 billion of IOUs to state suppliers it can’t afford to pay.

Mark Thoma from the University of Oregon discusses what would happen if California had its own currency and was allowed to print its own money as a way out of its predicament. He argues that a multiple-currency system in the US would allow each state to develop its own monetary policy. However, the added flexibility is set against the instability of fluctuating exchange rates, and higher transaction costs on trade between states.
Professor Joel West from San José State University ponders the reasons for his home state's decline, identifying “arbitrary” state regulations and taxes as the prime causes of the slump. In step with the increase in emigration from California to Oklahoma and Texas, West says he will make sure that his daughter will also leave the state when she finishes high school in seven years.
A slightly dated but still irresistible blog entry comes from Professor Robert Sutton at the Stanford Engineering School. Sutton, who made it onto BusinessWeek's 2007 list of “B-School All Stars”, objects to being labelled a “business guru”. Gurus, he says, “seem to do everything in their heads without thinking about others' work” while great scientists acknowledge what they owe to previous thinkers. Sutton also asks whether “you need a penis to qualify” as a star academic, noting that the top ten consists exclusively of white men. He goes on to list female academics whose work has had a lasting impact on the way we think about business.

As a tribute to Sutton, our final recommended blog entry comes from Professor Rita McGrath of Columbia Business School, who is worried about companies who would rather hire someone who is already employed than consider an unemployed candidate. While the reasons for this selective strategy are obvious, McGrath warns that such an approach might cause people to “sink into despair or into self-damaging behaviors.” She points out that having a job is not necessarily proof of a person's own achievements, and urges employers to also consider the fact that many people leave their jobs voluntarily for reasons such as founding a family or changing careers.

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