Economist Marshall Vest has sifted through vast amounts of demographic statistics in his more than three decades at the helm of the University of Arizona’s economic research center.
This week, Vest will become one of the numbers behind a key statistic he has studied for years — retirees.
Vest, 66, will retire on Thursday after 35 years as the head of the UA Eller College of Management’s Economic and Business Research Center. His successor is George Hammond, a longtime Ph.D. economist with West Virginia University.
The center, which has a staff of eight and an annual budget of about $1 million, provides economic data analysis and forecasting to sponsoring subscribers including the Arizona Legislature and several major banks.
Vest also is noted for something other than economics — he is a survivor of the Sept. 11 attacks on the World Trade Center. Vest was at New York Marriott World Trade Center Hotel — situated between the twin towers — when the attacks occurred and he was forced to flee.
The Star sat down with Vest and talked to him about his accomplishments at the UA, the profession of economics, and how the Sept. 11 attacks changed his life.
Q: Why are you retiring? Are you going to remain active in economics or the UA?
A: I’ve been here 35 years at Eller, in this center, and I’m just tired of working all the time. A lot of people just keep working until they’re 70. I’m looking forward to have the opportunity to think about something other than work. I have no specific plans at this point, I’m just taking time away here for a while and we’ll see what comes up next. … I’d like to spend more time with the family, with the grandkids, my wife and son. I play the five-string banjo, and I’m having a lot of fun with that; I go to the jams around town.
Q: What do you count as your major accomplishments in your UA career?
A: My pet project of course is the Forecasting Project. I came here 35 years ago to start that project, and to build that from a half-dozen sponsors to a couple of dozen sponsors today. It’s one of the top-rated, most successful forecasting efforts that you’ll find at any university in the country.
The Economic and Business Research Center was established in 1949, so it will be its 65th anniversary this year. Sixty-five years, and I’ve seen 35 of them, and I’m proud to say the center is strong, we have some of the best personnel that you’ll find at any center of its type in the country. I’ve handed that over to (incoming center director) George Hammond.
Q: Do you feel you’re leaving the economic research center in good hands?
A. (Hammond), he’s terrific, there’s only a handful of people in university settings who do this kind of things, and he’s the best. (The staff has) a background in economics, in regional development, finance, geography, library science, statistics, and most of the people who work here have at least two advanced degrees, master’s and Ph.D. level. The personnel have been here a long time, it’s a very stable environment and they’re all stars.
That’s probably my biggest accomplishment. I wanted to leave the center strong and in good hands and have been working very hard on that for two years.
Q: Who subscribes to the center’s services and what do your provide to them?
A: The banks, JPMorgan Chase, BBVA Compass Bank, CBRE, Elliott D. Pollack & Co. (a Scottsdale economics and real estate consultancy), Tucson Electric Power, Salt River Project, Arizona Public Service, the state of Arizona Joint legislative Budget Committee, the Arizona Department of Transportation, a lot of city and towns and local governments. We help them see what’s going on in the economy and what the issues are, and we give a forecast for Arizona, and Tucson and Phoenix. We gather a lot of data. Data nowadays have been democratized, you can get a lot of it from the Web, but you need to have someone to be able to know if the data’s any good, to authenticate and then interpret what that data means. That’s the business we’re in — economic intelligence, if that’s not an oxymoron.
Q: How has the science of economics changed since you started?
A: The technology is just mind-boggling. When I started, we had time-sharing computers that we dialed up, and we would put our handset device in the cradle (to transmit data). About that same time, we had one huge ‘supercomputer,’ so for our models, we had to prepare all the instructions and data on punch cards. … And the next morning you could pick up the results, because it took all night to run the model. Of course now, you hit the return button and it’s done, it’s right there and you can run the model 50 times in a day. And you can see how things change now through a graphical interface.
I think we realize now that there are limitations to the models, as to what we can measure and quantify and include in a model. But beyond that, the economy is very complex, it’s based on people’s decision-making, which at times is rational and well-informed and other times not. So economics is kind of a social science, it’s a study of human decision-making and there’s a lot about that we don’t understand.
How we construct the models, how we estimate those relationships, how we spin the models, it’s much better, so today we’re able to put together a forecast that is technically much better than we’ve ever been able to do before.
Q: What about the new smartphone app, Arizona’s Economy, that the UA research center recently unveiled?
A: It’s a really cool app, there’s not another university business research center that has one of these. What’s neat is, all this data is being updated in real time from our cloud database, which is a technology that we also developed working with a private-sector company out of Boston.
Q: What’s the value of the data you provide and how do your members take advantage of it?
A: The people we do this for, Arizona decision-makers, we want to give them a sense of where we are in the business cycle, what’s important for their particular industries, what they need to keep their eye on. When there are excesses, like we had in housing a few years ago, you want your audience to understand there’s great risk, and they have to know how to protect themselves.
We may not get the timing right, but I remember talking to audiences as early as 2006, warning them that there was a possible bubble building in housing and significant risk. I know some local builders understood that, guys that have been around and have seen business cycles. Those guys came out OK, they adopted the policies that kept their businesses solvent.
I think that’s the value we provide — that we provide this kind of big picture of the economy and where we are in the business cycle.
Q: And how do you think economists overall did in predicting the financial meltdown and resulting recession?
A: There was too much financial innovation and too little regulation. It’s hard to tell when a market is getting out of whack, you can’t really tell until the bubble has burst. (Alan) Greenspan, who was the Fed chairman at the time, said he didn’t see it coming. The size of this thing was way beyond anyone could imagine, but when you see markets get frothy, when you hear the anecdotes about busloads of Californians coming here and going from subdivision and writing out a check at each one ... those are clear signs there is a bubble. It was just that we didn’t know what the depth of it was, and how bad it would be — that was the surprise.
Q: Has the economics profession learned from the experience?
A: I think the profession now knows and realizes its limitations. You know, back in the ’60s and ’70s and ’80s, the idea was that economists could control the economy, through policy-setting, monetary and fiscal policy. The profession has learned that there’s a lot more going on that is simply beyond anybody’s control.
Q: Do you have any regrets?
A: The one thing that I would change is, if I were a better forecaster, perhaps I could have foreseen the attacks on the World Trade Center.
Q: As a survivor, how did the Sept. 11 terrorist attacks change your life?
A: A number of ways. It was a very sad event, we Americans lost our sense of security, and the grief and the mourning for all who lost their lives — it was just tragic. For me personally, I came to really appreciate family, friends, colleagues here in the Eller College but also in the community. When I got off that airplane when I finally got back Sunday afternoon, I stepped off that airplane and it just hit me — I really love Tucson and there’s no place I’d rather be.
Q: Do you keep in touch with other survivors?
A: We were at a professional conference and there were 400 economists there, so I see people who were there. At the time, cell phones were expensive and the minutes were expensive, so you never gave out your telephone number to anybody, but you carried your cell phone with you so you can make a call. So there were all these people with cell phones, and nobody knew anybody else’s number. ... To this day, whenever I go to an event, I have telephone numbers of other people at the event — I have everybody’s cell number now.
Some of my colleagues retired right away and moved to the country, so it had a big psychological impact.
When that first tower came down and the big cloud of dust stories high came rolling down the street, a small group of us had gathered at Battery Park about four blocks away, and everyone ran. … We saw this big cloud of dust and we thought it was another event, so it was at that point I thought we were all going to die, and that’s not a good feeling — that will shake you to your core. I came away from that event with a keen understanding of what PTSD (post-traumatic stress disorder) is, and have a much better appreciation for what our military and our police and our firemen, people who put their life at risk, what’s that all about.
Q: Were you diagnosed with PTSD?
A: Yeah, I did counseling and took drugs and the whole works to get through that. It was the support of family and friends and colleagues and community that helped me get through that. But it was the end of the year before I really started feeling like myself again.
It was a lot of pain when I didn’t even know I was hurting. It was very hard to concentrate, for weeks, just getting dressed in the morning was like a three-ring circus, I’d brush my teeth and put my toothbrush up and say, ‘Did I brush my teeth?’ ”
Q: What would happen if someone called you tomorrow and said, “We’re starting this big economic project we want you to head”?
A: I really don’t want to do anything for six months. ... It depends if it’s something that I can do and something that I would enjoy doing.