It saddens me to convey that Cato Institute adjunct scholar and my friend Shirley Svorny passed away October 20 from multiple myeloma.
Shirley was less than two weeks shy of her 71st birthday.
Shirley Viola Svorny entered the world in Los Angeles and earned her bachelor’s, master’s, and doctoral degrees in economics from the University of California, Los Angeles.
Her dissertation sought to “explain why U.S. policy makers diverged from their usual policy to allow unrestricted migration [of foreign‐trained physicians] from 1965 to 1980.”
Without liberalization, “the unprecedented expansion in health care expenditures” that followed the creation of Medicare and Medicaid “may have led to severe queues or price hikes” that would have angered consumers. Shirley found evidence that liberalization increased the supply of physicians and reduced prices for physician services.
She argued that domestic physicians temporarily yielded to liberalization because “in order for physicians to maximize their long‐run earnings, they must avoid actions that would cause consumers to put pressure on the government to repeal some of the legislation that currently protects physicians from competition.”
From 1978 to 2013, Shirley was a professor of economics at California State University, Northridge, where she taught health, labor, and urban economics.
She took leaves of absence during the 1980s to do economic analysis for Getty Oil and Security Pacific National Bank. In 1996, she founded CSUN’s San Fernando Valley Economic Research Center and served as its director for four years. From 2003 to 2009, she served as chair of the economics department at CSUN. After 2013, she switched to professor emerita status.
Shirley’s work first marched under the Cato banner in 1994 when she and husband Robert C. Krol coauthored a Cato Journal article presenting evidence that state banking, trucking, and labor regulations had “negative employment and output effects.” In 2004, the duo explained in Cato’s Regulation magazine that moral hazard led to the insolvency and collapse of the government‐run Los Angeles Community Development Bank.
Given what happened a few years later, perhaps more federal officials should have read that article. Given their conclusion—“Loans are not welfare”— federal officials should still read it now.
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