Economists advising on financial reform mostly hid private industry affiliations

Evidence

The shadow banking sector has performed a minor séance, and conjured a shadow economist sector. We now have a better idea just who the Americans are who currently inhabit this shadow economist finance sector. Charles Ferguson, in his book Predator Nation, describes many of the key players by name: he covers Glenn Hubbard, Larry Summers, Fredric Mishkin, Richard Portes, Laura Tyson, Martin Feldstein, Hal Scott, and John Campbell. The University of Massachusetts economist Gerry Epstein has taken a different tack, with a somewhat different roster. Epstein and his collaborators have collated two data sets linked to economists regularly summoned to pronounce upon financial regulation during the crisis, comparing the positions taken in their academic work and their “outside” positions and consultancies (derived entirely from public sources). Since it would be a daunting task to subject the entire profession to audit, he chose to pursue the prosopography of the manageable subset of financial economists who had presented themselves as “faceless” representatives of the orthodox economics discipline, either through the Squam Lake group (covered above) or the Pew Economic Policy Group Financial Reform Project. By keeping the target group limited to nineteen prominent economists, his team was able to explore the nature of ties to financial firms in somewhat greater depth than one encounters in the news media. However, working only from open sources, the report depends entirely upon some manifestation of self-disclosure turning up in some public context; therefore, it necessarily underrepresents the true nature of financial connections. … We find that 15 of 19 economists had private financial affiliations over 2005–09. The norm for economists was to not identify their private financial affiliations, establishing the need for a code of ethics prescribing disclosure guidelines. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 577

Categorization

• QUESTION: The admission that open-source tracking underrepresents true financial connections leaves open how much larger the real figure might be.
• XREF: Connects to the broader thought-collective thesis and to Mirowski’s earlier discussion of the Squam Lake group in prior chapters. — connects to: Academic economists’ private financial ties predict weaker calls for regulation — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 2129; Economists publicly deny the industry ties that structure their profession. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 566; Economists opposing the bailout publicly hid their Cato Institute affiliations. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 639 (+3 more)

Broader Connections

• The economist career conveyor belt into finance undermined the pretense of independent expertise #expands (0.85) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 581
• Economists opposing the bailout publicly hid their Cato Institute affiliations. #qualifies (0.78) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 639
• Economists involved in financial innovation disappear their own roles when narrating crises #expands (0.78) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 571