I’ve written recently about the article that lent academic credibility to using contractionary policies against the ongoing economic crisis, despite evidence to the contrary (as provided by Krugman, see here and here). That artcile was debunked by a grad student that showed egregious errors in it, which basically invalidate their conclusion. Part of it was a flawed spreadsheet, but even discounting that, the authors of the paper took some arguable decisions in excluding or including certain country and/or year-specific data in their calculations (did anyone say cherry-picking data?).
Turns out the situation is even worse. The authors of the disgraced paper have close ties (and are funded) by a millionaire with specific interests in the outcome of contractionary policies, as detailed by PRWatch on a scathing exposé. The whole thing is mandatory reading, but I will highlight just two paragraphs:
“It will come as no surprise that Reinhart and Rogoff have ties to Wall Street billionaire Pete Peterson, a big fan of their work. Peterson has been advocating cuts to Social Security and Medicare for decades in order to prevent a debt crisis he warns will spike interest rates and collapse the economy. (Peterson failed to warn of the actual crisis building on Wall Street during his time at the Blackstone Group.)“
“As the Center for Media and Democracy detailed in the online report, “The Peterson Pyramid,” the Blackstone billionaire turned philanthropist has spent half a billion dollars to promote this chorus of calamity. Through the Peter G. Peterson Foundation, Peterson has funded practically every think tank and non-profit that works on deficit- and debt-related issues, including his latest astroturf supergroup, “Fix the Debt,” which has set a July 4, 2013 deadline for securing an austerity budget.“
One of the most shocking revelations (for me, at least) in the documentary “Inside job” was the fact that the author of a laudatory whitepaper on the economy of Iceland (which crashed spetacularly before the ink could dry) was a respected academic economist who was paid to write said report, and did not disclose this.
It has been a norm in the biomedical area for at least two decades or so the mandatory reporting of potential conflicts of interest in scientific publication. Although it hasn’t done much to stem those, at least they are out there in the open. It is worrying and shameful that in such a strategic area such as Economics this kind of disclosure can be ignored. This, paired with the intertwined infrastructure of think tanks, academic endowments, and political positioning in relevant institutions has helped to establish neoclassical economics as the dominant strand in academia, even without any compelling demonstration of its empirical superiority.
Concluding, I just stumbled upon news of a study that links belief in free-marjet economics and a distrust for science. It figures.