Lobbying masquerading as research

Posted: 15 February 2011 in Uncategorized
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On Sunday, the Wall Street Journal claimed, based on a report prepared by Keybridge Research [pdf], that “Upwards of 130,000 jobs could be lost if U.S. regulators impose new restrictions on derivatives transactions too broadly.” (The study was commissioned by the Coalition for Derivatives End Users, an umbrella group of trade associations including the Business Roundtable and the U.S. Chamber of Commerce, a fact which is mentioned in the WSJ story but given no particular importance in terms of evaluating the claims made in the report.)

John E. Parsons and Antonio S. Mello, in turn, criticized the key findings in the report.

But it wasn’t until yesterday, when Andrew Ross Sorkin looked more closely at the story, that it became clear how questionable the academic credentials behind the report are.

The study was conducted by Keybridge Research, a seemingly independent economics and public policy consulting firm. The firm’s bona fides include an all-star roster of academics, including Joseph E. Stiglitz, a Nobel laureate in economic science; David Laibson, a professor of economics at Harvard, and Stephen P. Zeldes, a professor of economics and finance at Columbia’s Graduate School of Business.

But a closer look at the report raises some serious questions. For one, the findings seem oddly out of step with the views of some of the group’s luminaries, including Mr. Stiglitz, who is advertised on Keybridge’s site as an adviser.

How could that be?

Well, it appears that Mr. Stiglitz and many of the firm’s advisers are not advisers at all.

Here’s how Ryan Chittum summarizes the episode:

Corporate lobbyists want to keep derivatives, which were central in the collapse the financial system, as unregulated as possible. They give money to a research firm that boosts its credibility by listing several luminaries as advisers who either aren’t or haven’t been in some time. The research firm writes what corporate lobbyists want. It’s rewritten by The Wall Street Journal on its website and Dow Jones on its newswire.

It’s becoming increasingly clear that the Inside Job only exposed the tip of the iceberg of pro-business lobbying masquerading as academic research.

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