The Hypocritic Oath

In his excellent weekly post Economic Principals (
David Warsh wrote last week about the American Economic Association’s decision
to require that all publications come with disclosures.  Specifically, the executive committee has recommended that all those wanting to publish in any of the seven journals ofthe association must disclose;

  1. “Interested parties from whom they have received over $10,000 during the past three years, including consulting fees, retainers, grants, as well as in-kind support, such as access to data.”
  2. Unpaid positions, both non-profit and for-profit.
  3. The same information for authors’ partners and close relatives.
  4. Parties with the right of prior review.

These guys (and gal) mean business.  Noting the increase in papers produced with
something less than pure motives, and data, the committee is seeking to restore some credibility to the dismal science.  For this they are to be commended.

Would that a similar action could find its way into other areas.  Warsh’s column triggered in my all too leaky memory an article from last summer’s The American Scholar by Harriet Washington, Flacking for Big Pharma ( Continue reading

Through a Frosted Glass, Darkly

In an article published just before Christmas, Lisa Pollack, writing for FT Alphaville
(, posed the question, Why is finance so complex?  She concludes that it may
be due to the “Flynn Effect,” which credits an increase in intelligence, i.e. finance gets more complex because people in finance get smarter and can make it more complex. Continue reading

Hide and SEC

I can’t help but be amused as I watch the politicians, regulators and Wall Street do that voodoo they do do so well.  First the traders and bankers hide while new rules and regs are proposed, and then the pols hide while the lobbyists eviscerate these same proposals.  Further fun is trying to figure out what side of the issue academics will take, but I digress. Continue reading

The Last Contango in Washington

The silence has been deafening.  Everyone must be watching the stock market.  At least, everyone who wants to discuss the “market” these days means watching the stock market.  To be sure, there are a few “sophisticated” types who have learned what a credit-default swap is.  A few more may decry the renewed weakness in the dollar, but usually if they are planning a trip to Europe. Continue reading

CDs, CDs and CDSs

There are CDs and there are CDs. And then there are CDSs. If you are of my generation, a CD is a Certificate of Deposit that earns interest income. If you are of a younger generation, a CD is a Compact Disc that replaced vinyl records and is a source of music. If you are anywhere near the news these days you are aware of CDSs, which are not the plural of either of the above. Continue reading

Yesterday’s Fight—Tomorrow’s Energy Policy

Some time ago, President Bush acknowledged that Americans are “addicted to oil.”  Since then he has done nothing to help break the habit.   As has been noted by many others, “Drill, Baby drill,” is not the way.  It merely offers the market a new pusher, albeit years from now.  More is the problem if that is the best we can do. Continue reading

Congress Fannies the Flames

Wake up, o ye member of Congress! Arise and throw off your chains of ignorance! The Congress of these United States have decided to use Marx to help solve the problem with the GSEs, known more familiarly to those who know them at all as Fannie Mae and Freddie Mac. The only problem is that they are using Groucho, not Karl. Reminiscent of the scene in A Day at the Races, where Groucho is forced to buy more and more books from Chico in order to get the odds on the race, the American people are being forced to buy more and more into the idea that the Congress can actually do something to legislate away down markets. Continue reading