Washington Babylon — September 9, 2009, 11:12 am

How the Fed Buys Top Economists (and Journalists)

From Huffington Post:

The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.

This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed’s thrall, the economists missed it, too.

“The Fed has a lock on the economics world,” says Joshua Rosner, a Wall Street analyst who correctly called the meltdown. “There is no room for other views, which I guess is why economists got it so wrong.”

One critical way the Fed exerts control on academic economists is through its relationships with the field’s gatekeepers. For instance, at the Journal of Monetary Economics, a must-publish venue for rising economists, more than half of the editorial board members are currently on the Fed payroll — and the rest have been in the past.

Of course, the Fed offers lots of perks to friendly journalists too. For years, the Fed invited favored reporters to watch the 4th of July fireworks from the Fed’s roof, and journalists love to attend the Fed’s annual economics retreat at Jackson Hole, Wyoming. Here’s how Bob Woodward described the retreat in Maestro, his fawning profile of Alan Greenspan:

Held at the foot of the Grand Teton Mountains, the conference offered much needed relief from Washington, D.C.’s August swamp weather. Central bankers from around the world, in addition to academic economists, policy makers and journalists, attended seminars in the morning and then enjoyed outdoor activities in the afternoon.

Between three square meals a day and ample time at the bar.

Share
Single Page

More from Ken Silverstein:

From the November 2013 issue

Dirty South

The foul legacy of Louisiana oil

Perspective October 23, 2013, 8:00 am

On Brining and Dining

How pro-oil Louisiana politicians have shaped American environmental policy

Postcard October 16, 2013, 8:00 am

The Most Cajun Place on Earth

A trip to one of the properties at issue in Louisiana’s oil-pollution lawsuits 

Get access to 164 years of
Harper’s for only $34.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

May 2014

50,000 Life Coaches Can’t Be Wrong

= Subscribers only.
Sign in here.
Subscribe here.

The Quinoa Quarrel

= Subscribers only.
Sign in here.
Subscribe here.

You Had to Be There

= Subscribers only.
Sign in here.
Subscribe here.

A Study in Sherlock

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Post
“In Thunupa’s footsteps grew a miraculous plant that could withstand drought, cold, and even salt, and still produce a nutritious grain.”
Photograph by Lisa M. Hamilton
Article
A Study in Sherlock·

= Subscribers only.
Sign in here.
Subscribe here.

“It is central to the pleasure of the Sherlock Holmes stories that they invite play, and that they were never meant to be taken seriously.”
Illustration by Frederic Dorr Steele
Post
My Top 5 Metal Albums and Their Poetic Counterparts·

= Subscribers only.
Sign in here.
Subscribe here.

“1. Death, The Sound of Perseverance (Nuclear Blast, 1998)”
Photograph (detail) by Peter Beste
Article
Found Money·

= Subscribers only.
Sign in here.
Subscribe here.

“I have spent my entire adult existence in a recession. Like most people I talk to, I assume the forces that control the market are at best random and at worst rigged. The auction shows only confirm that suspicion.”
Illustration by Steven Dana
Post
The School of Permanent Revolución·

= Subscribers only.
Sign in here.
Subscribe here.

“The University of Venezuela has provided a consistent counterweight to governmental authority, but it has also reliably produced the elite of whatever group replaced the status quo.”
Photograph © Daniel Lansberg-Rodríguez

Percentage of non-Christian Americans who say they believe in the resurrection of Christ:

52

A newly translated Coptic text alleged Judas’ kiss to have been necessitated by Jesus’ ability to shape-shift.

Russia reportedly dropped a series of math texts from a list of recommended curricular books because its illustrations featured too many non-Russian characters. “Gnomes, Snow White,” said a Russian education expert, “these are representatives of a foreign-language culture.”

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST