I'm clearing egg from my face as I write this roundup of reader feedback, catching up to your reactions to my columns of the last couple of months.
That's because of an oversight I made in my column last Sunday about the state's latest budget outlook. Near the end, I mentioned that one of the big economic contradictions in the U.S. this year is that inflation retreated without causing a recession and a spike in unemployment. "That's counter to economic theories," I added.
It is not counter to theories developed at — feel the egg coming — the Federal Reserve Bank of Minneapolis and the University of Minnesota.
Over the last 50 years, economists at our hometown institutions played important roles creating a new understanding of macroeconomics that goes beyond the well-known formula called the Phillips Curve that I had in mind. The theory behind the Phillips Curve is that inflation and unemployment have an inverse relationship, depicted as a curve on a graph.
As a young economist at the Minneapolis Fed in the 1970s, Tom Sargent helped a colleague at the University of Chicago, Robert Lucas, expand on the idea that inflation is also influenced by expectations people have. Powerful institutions, like the Fed, play a role in shaping those expectations, they argued.
Both later won Nobel Prizes, in part for this work on what is known by economists as rational expectations theory. Lucas died earlier this year at age 85.
Art Rolnick, another young economist in the Minneapolis Fed at the time and its research director from 1985 to 2010, e-mailed to alert me to the mistake. "There's strong evidence you don't have to cause a recession to bring inflation down," Rolnick told me in a subsequent phone conversation.
Few in the media have explored this, he said, because economists are still debating it. "I'm not saying there's uniformity of opinion," Rolnick said.
It's only recently that many economists began to think the U.S. will achieve a "soft landing" from this period of high inflation and high interest rates. The Federal Reserve's signal on Wednesday that it will soon cut interest rates made that happy outcome more likely.
For a time, this division fell along loose geographic lines. Economists in Minneapolis, Chicago, Madison and a few other places in the Great Lakes region were known as the "freshwater" group. They tended to disagree with economists on the coasts, known as the "saltwater" group, who believed most strongly in government intervention during economic downturns.
One of the country's most prominent economists today, Tyler Cowen of George Mason University, in some blog posts and columns for Bloomberg this summer said the "freshwater" theories of Lucas and Sargent appeared to be playing out.
The Star Tribune editorial page republished one of those pieces in July. In it, Cowen wrote, "Granted, the rational expectations view is not always correct — and a recession somewhere down the road isn't out of the question — but at least in this instance America pulled together and did the job."
The lesson for me is to be careful about making absolute declarations, particularly about economic theories, and to learn more about the groundbreaking work that happened here.
Ryan Winkler, an attorney and former DFL House leader, wrote to suggest that I should have noted in that column the effect of inflation calculations on the state's budget outlook. The state dropped inflation calculations a short time after the 2001 recession. Lawmakers voted earlier this year to use them again.
"That entirely changes the public discussion and political dynamics on taxes and spending," he wrote.
That's true. In a later conversation, I told him that I believed our news coverage tracked that well. An editorial last week also took note of it. Not accounting for inflation gave legislators a "false narrative," Winkler said, making surpluses look bigger and deficits look smaller.
My Nov. 18 column about the status of nursing employment in Minnesota, with Mayo Clinic at the center of the discussion, led several readers to write or call with more reasons for the complex dynamics between hospitals and nurses. They included things like the inconsiderate way that doctors interact with nurses.
One factor I should have included as a baseline piece of information is how hiring became constricted during the pandemic year of 2020. Hiring for health care professionals fell 23% that year, the Minnesota Hospital Association reported. Even before then, hospitals weren't able to hire at the rate that doctors, nurses and other staff were leaving jobs. Last year, they did, MHA data shows.
Jon Pryor, a physician and health care executive in Minnetonka, wrote to say he worries that a crisis is ahead. Higher salaries and technological solutions, which were mentioned in the column, won't be enough, he said.
"You can always pay more to get more nurses. Then, people are not becoming physician assistants or they are not becoming dental hygienists," Pryor told me when I called him to for some elaboration. "It all comes down to the basic issue. There's just not enough people."
While I didn't weigh in on the hottest issue in Minnesota these days — the design of a new state flag — I'll echo my colleague Laura Yuen by saying all the finalists had their merits. Like her, I liked the finalist with the wavy lines that look like a river and the aurora borealis. I also liked the one with the little stripes for the counties and Native American nations.
My favorite design didn't become a finalist, though. It was F1010, which depicted a red pine tree on a slip of green atop a stripe of blue. It would have put Minnesota in the company of California, Illinois and Massachusetts with distinctive white flags. I also like its five-pointed star, as on the American flag.
Water, land and the state tree standing tall like a beacon, all of it alluding to an exceptional place in this country. At least that's my theory.