Thursday, September 10, 2009

Worst Attempt at Character Assassination... Ever

. Thursday, September 10, 2009

Shorter Ryan Grim: "The Federal Reserve should not be allowed to hire economists; it should be staffed by reactionaries instead".

(Full disclosure: I have once been inside a Federal Reserve building (Chicago), and I even have the business card of one of their senior economists. So I've clearly been bought-and-sold.)

(Full disclosure II: Alex once participated in a "Fed Challenge" (sort of a "Model U.N." for economics students) while an undergrad. So he clearly has no integrity at all whatsoever.)

(Full disclosure III: SBD once worked at a bank, and banks deal with the Fed every single day. Her livelihood was directly related to compliance with Fed diktat, so she clearly is a shill of Greenspan and Bernanke.)

(Full disclosure IV: None of us predicted the biggest outlier in the past 80 years of financial history. So we're clearly in league with the nefarious Fed.)

Case closed: the influence of the Fed is everywhere, and it is pernicious. Pretty soon, Dan Brown will be writing books about how Ben Bernanke is the secret love child of Alan Greenspan and Ayn Rand.

Seriously: I have neither the time nor the energy to go after Grim point-by-point, and I'm not the best person for the job anyway (but surely someone who is so qualified will take the time). But I'd just like to point out how little Grim knows about his subject. Take this passage as illustrative:

The Huffington Post reviewed the mastheads of the American Journal of Economics, the Journal of Economic Perspectives, Journal of Economic Literature, the American Economic Journal: Applied Economics, American Economic Journal: Economic Policy, the Journal of Political Economy and the Journal of Monetary Economics.

HuffPost interns Googled around looking for resumes and otherwise searched for Fed connections for the 190 people on those mastheads. Of the 84 that were affiliated with the Federal Reserve at one point in their careers, 21 were on the Fed payroll even as they served as gatekeepers at prominent journals.

At the Journal of Monetary Economics, every single member of the editorial board is or has been affiliated with the Fed and 14 of the 26 board members are presently on the Fed payroll.

Let's look at that list. The American Economic Journal: Applied Economics (the 446th most important Econ journal) made the cut, as did the American Economic Journal: Economic Policy (ranked 530). The "American Journal of Economics" is not in the top 790, if it exists at all (it seems not to, at least if Google can be trusted. Considering that Google is Grim's primary investigative tool for this survey, this fact seems somewhat damning to his argument).

Meanwhile, what is missing from that laundry list? Oh, I don't know... maybe 7 of the top 10 journals in the field? Metrics for ranking journals varies somewhat, but most people agree which journals are in the top 10 and any survey of top Econ journals must include, as a minimum, the Quarterly Journal of Economics, the American Economic Review, and Econometrica. None of them made Grim's list.

A charitable interpretation of this is that Grim has no idea what in the hell he's writing about. Actually, there's no question about that at all. What is unclear is whether he is also being intentionally dishonest, or whether his bad-faith arguments are accidental.


Worst Attempt at Character Assassination... Ever
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