The Glenn Hubbard Scandal
There isn’t one of course. But there ought to be.
In my mind, and I admit I am probably alone in this, Glenn Hubbard represents all that is wrong with the economics profession. Were there a scintilla of an ethical standard in economics Hubbard would be the first person disbarred.
OK. That’s harsh. But allow me to defend my position.
Hubbard is a leading academic economist. He is well known for being incredibly conservative in his political views, and since economics is an adjunct activity to politics and has no independent scientific standing, he uses his academic position to proffer highly conservative policy suggestions. He wades into politics with an astonishing ease and thinks nothing of being the point man for the Romney campaign’s economic policies.
None of this is unethical in and of itself. It is simply demonstrative of the deep and ongoing failure of economics to develop anything like a coherent scientifically sound and real world based theory. Anyone can opine on economics because there is no accepted central theory that needs to be studied or learned. Instead there is a rambling, incoherent, and persistent rabble of ideas, some useful, some idiosyncratic, some old, some new, ancient, or modern, with no thread other than the one you want to weave yourself.
It’s fun being an economist because you can never be wrong. Somewhere there’s a theory that fits any attitude, any political view, and any circumstance. You can hire yourself out for a fortune and add no value. You can become the perfect expert witness because what you are expert in is magic or sleight of hand.
This is exactly what Hubbard does.
And it is this that annoys me. I think he should be forced to choose. Transparency and honesty demand it.
He should be forced to choose whether he is a consultant out for hire; whether he is a politician; or whether he is a teacher responsible for passing along a balanced view of the state of the art of economics. He cannot be all three at once without sacrificing his credibility in one of those other areas. His lack of choice is the heart of his lack of ethics. He is a walking, talking, conflict of interest.
It is well known that Hubbard is for hire. He will sell you, at very high prices, his expertise. That is he will defend your hedge fund, your private equity position, or your view on just about anything. So malleable is his expertise – which alone is an indictment of economics – that he can defend everything or nothing equally well. He epitomizes the outsider’s notion of an economist: that is someone who has an analytical framework and set of techniques, but no theory of an economy.
He is for sale.
Which makes me wonder what he teaches.
How to be a consultant? Or how to be an economist? If the latter, what kind of economist?
I was set off on this rant by reading Paul Krugman’s column. He attacked Hubbard, rightly in my mind, for perverting economics. Or rather for contorting it into a political statement. Hubbard is brazen in ignoring all the recent, and copious, research that suggests recoveries from a financial crisis are different, more difficult, and slower than those from ‘normal’ recessions. Thus our current recovery cannot be compared with that from the deep 1981/82 crisis. Yet that is precisely what Hubbard does. Blithely. In his for-hire-to-Romney role he skims past the evidence in order to make a point for his boss. By so doing he does violence to any pretense economics has to being a science. Indeed he damages any such prospect. He confirms that economics has no core and that it is just so much vapor added to the political fog.
Perhaps he doesn’t care about economics. After all he has made his millions. But surely Krugman and others do. So why is it that people like Krugman are not supportive of an effort to inject ethical standards into the profession?
This is the real issue: until the leading lights of the profession have the guts to admit that there is a conflict of interest between being an economist-for-hire and an economist-as-teacher, and the two roles – both legitimate – ought be transparently divided, the profession will remain wallowing in an ethical quagmire.
Well, at least I think so.
To me that’s the Glenn Hubbard scandal.
Apparently, though, I am alone.
Meanwhile a word of advice: don’t believe a word an economist says until you know who paid for the research and until you know which side of the ideological divide he or she stands. Perhaps not even then. Better yet: ask them what their stand on ethics in the profession is. If they start to mumble and look confused, walk away smartly. That way you will avoid being sold snake oil.
