There’s a new study on how high-profile academic financial economists are paid to do the bidding of our Galtian overlords:
In this study, we showed that the great majority of two groups of prominent academic financial economists did not disclose their private financial affiliation even when writing pieces on financial reform. This presents a potential conflict of interest. If this pattern prevailed among academic financial economists more broadly this, in our view, would represent an even greater social problem. Academic economists serve as experts in the media, molding public opinion. They are also important players in government policy. If those that are creating the culture around financial regulation as well as influencing policy at the government level for financial reform also have a significant, if hidden, conflict of interest, our public is not likely to be well-served.
Felix Salmon makes the obvious point…with a telling anecdote:
It seems obvious that when you’re regularly making significantly more than the median national annual personal income from giving a single speech, you’re prone to being captured by the people paying you all that money. And the secrecy makes things much worse. I once mentioned in passing on my blog a consultancy gig which I happened to know about and didn’t think was particularly secret. The consultant in question phoned me up extremely distraught, fearful that the employer, a hedge fund, would read my post and react to it with a whole parade of nasty possible actions. There’s no good reason for such secrecy on either the employer or the employee side — unless, of course, there’s something ethically suspect about the arrangement in the first place.
Maybe I’m wrong to fixate on this so much, but I see this kind of thing as the central problem facing contemporary democracies: it’s too easy for monied interests to control the flow of information. You want a very serious economist to endorse whatever scam you’re running? Give him a few hundred thousand for speaking fees, consulting fees, whatever the term is that they’re using these days. That’s chump change, but it’s a lot to him or her, and you can probably find a respectable person who’s enough of a whore to do it, if you look around.
There’s a crazy asymmetry at work when things that are worth a lot can be bought for so little, and this is just one example. People make a big deal out $4 billion spent on an election. That’s not a lot of money to buy off the people who run a $3 trillion budget. At least there used to be transparency about that particular form of bribery, but not anymore.