“The worst types, however, are academic economists who . . . “
from Edward Fullbrook
Have you seen Inside Job yet? I haven’t, but I probably will after reading its rave reviews yesterday in the UK Sundays. It has been nominated for best full-length documentary Oscar. It is about the origins of the financial collapse and of the current economic crisis, and apparently identifies economists as being the primary villains.
The film includes a telling of the moment when Larry Summers, then Clinton’s Treasury Secretary telephoned the regulator Brooksley Born who was trying to impose some sort of order on the derivatives market and said to her:
“I have 13 bankers in my office, and they say if you go forward with this you will cause the worst financial crisis since the Second World War”.
In The Sunday Independent, Sean O’Grady writes:
Yet the most pathetic and fascinating individuals in this film are the economists, whose uncomfortable links with private enterprise and the banks are excruciatingly dragged out of them. Fingering them is a novelty, and they come off badly. Especially enjoyable is a tetchy exchange with Glenn Hubbard, former economic adviser to George W Bush, and current dean of Columbia University Business School. No, he won’t tell us his outside earnings.
Equally relishable is the spectacle of Frederic Mishkin, a professor at Columbia and former member of the US Federal Reserve, looking mortified about the $124,000 he was paid by the Icelandic chamber of commerce to write a paper extolling the stability of their financial system. But best of all is John Campbell, honorary fellow of Oxford University’s Corpus Christi College and chair of the Harvard Department of Economics, who ends up more flummoxed than any mere academic has a right to be.
In The Observer, Philip French writes:
. . . the man who to me is the hero of the movie, lawyer Robert Gnaizda, former president of the public-interest Greenlining Institute. The outspoken Gnaizda is the only person to say there should have been major prosecutions. He adds that there won’t be because too many people with top positions in government, the academic world and Wall Street are involved.
The worst types, however, are academic economists who see no problem in having one foot in Washington, one foot on campus, and their mouths in the corporate trough as highly paid advisers and apologists for Wall Street firms. One of them explains his sudden decision to leave government service when things hotted up by saying he had to revise a textbook. They represent a clear example of that betrayal of intellectual responsibility and disinterestedness that 80 years ago the French thinker Julien Benda famously called “la trahison des clercs”.