“The cohort of professors who broke the back of the American dream”
Adbusters #99 Jan/Feb 2012 carries a hard-hitting article on “financial kickbacks” to big names in the economics profession. Here are some quotes.
US academic superstars played leading roles in the 2008 financial collapse. . . . Backing every policy decision leading to Lehman Brother’s bankruptcy in 2008 and the $700 billion public bailout was a team of prestigious Harvard and Columbia economists all on the payroll of corrupt financial institutions. None of these academic offenders ever disclosed to their universities, their students, their publishers or the press the financial gains they were making promoting deregulation. These wolves in sheep’s clothing subverted the ethical base of their discipline – and their own consciences – without moral pause because economic departments don’t require professors to come clean with conflicts of interest.
The article then specifies sums of money involved and board memberships for Frederic Mishkin, Martin Feldstein, Lawrence Summers and R. Glenn Hubbard. It then says:
The inability for American policy makers to clean their financial house or prosecute those behind the veil of the collapse has had a devastating effect on the American psyche.
And it notes:
Not a single academic has been held accountable for their role in the greatest transfer of public money into private hands in human history. The cohort of professors who broke the back of the American dream, funnelling ten million family homes into their lavish speaker fees, business appointments and papers for hire, haven’t even said so much as “I’m sorry” – let alone admit any wrong.
And
A culture of secrecy, anathema to the academic tradition of objective and honest enquiry, pervades the discipline.
Spender and I, in Confronting Managerialism, consider the issue primarily in terms of ignorance, i.e., that their knowledge deficiencies prevented them from knowing the wrong they do. But you are saying that they knew what they were doing was unethical and did it anyway. That is a very serious charge about which something must be done. But what? It seems to me that the place to start is with faculties in business schools. They need serious reminders about their public responsibilities. They are not just working for themselves but hold a public trust.
I am not saying; I am quoting.
We are essentially dealing with the Soviet phenomenon: Those academics prepared to support the system are richly rewarded. And there are plenty of takers.
adbusters also cites Kenneth Boulding :
Kenneth Boulding was an economist known for having a way with words and refusing to mince them. His most biting criticisms were reserved for the myopia of his own discipline: “Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist” and “Mathematics brought rigor to economics. Unfortunately it also brought mortis.”
K Boulding
one of my all time hero’s
the exponential growth quote is the underlying premise behind “The Limits to Growth”
what we are seeing now is the human race hitting the physical limits
I am sure some of these academics knew exactly what they were doing – lining their own pockets whilst pushing for extraordinary de-regulation and favourable policies to the large financial institutions that were heping to line their pockets. They had crossed the line well and truly between public and social responsibility and private self interest. Not only that – they invented a economic fairy tale to camouflage their actions; concerning the primacy of private self interest over all other economic considerations.
Surely you cant suggest that these academics didnt know? If they didnt know the likely consequences of their actions, and didnt have the ability or the inclination to assess the effectiveness of said policy, they dont deserve the qualifications they are in possession of.
I gather we are discussing Friedman and the Chicago School of Economics and the disciples that believed what they were taught.
Unspecific fulminations are not enough, – we have to have names that can be pilloried.
Is it too late to suggest sympathy for the Devil and devils working for the ultra-rich? Yes, they sabotaged the global Consumer Society’s money game, but would the 99% now be ready for radical change otherwise?
Now, even citizens of the USA are mostly aware of the nature of the game, Plutonomy. Without being forced by grievous circumstances, we usually choose to remain numb & dumb to the point of needing a major emergency overhaul.
The evil Banksters may have acted for God, afterall. We may soon be getting a thorough reassessment of what passes for modern civilization.
Hopefully, it will be in time to preside over the health of the ocean and rain forests. We may not be so lucky. So, the jury is still out…
We have been down this road before. Check out Linda McQuaig’s/Neil Brooks’ book The Trouble With Billionaires.
Universities in Australia require academics to disclose sources of outside income. Is there no such requirement in the US?
Of course that doesn’t mean universities would necessarily object to conflicts of interest, beyond ensuring that they’re getting their notional ‘four days out of five’ service from academics.
Individuals yes; power, greed and egocentric. But as institutions, U. of Chicago, Columbia and Harvard are playing class driven politics and influence peddling goes a long way to explaining these perverted incentives to wealth and personal status seeking postures. What were the chances that it would rise to haunt their reputations? These are the leaders of colonial rule in a free for all market of power. The Institutions are the core problem, these monkeys only work to tool the machine.