Economists in Politics

The atmosphere in the North American academic community has recently become quite heated. Last week, a group of 576 economists, six of whom were Nobel Prize winners, spearheaded a manifest in which they endorsed Mitt Romney’s candidacy while condemning Barack Obama’s economic policies.

In this manifest, the Republican economists state their support for a number of economic policies: “lower marginal tax rates on business earnings, as well as increasing the tax base to increase investment, jobs and living standards.” Additionally, they say that public spending needs to be controlled so as not to exceed 20 percent of GDP, and that the government must settle its “explosive” debt.

Both measures are irresponsible. The current public deficit, which accounts for 9 percent of GDP, was brought about under the administration of George W. Bush, who enacted many tax cuts for the rich. The deficit was further deepened by the financial crisis, which spread globally because of the free market policies that these same economists celebrated and helped to put into effect 30 years ago. To reduce state spending by one third would mean a deterioration of public health and education, a reduction of public investment in infrastructure and scientific development and an increase in socioeconomic disparity. In matters of inequality and corruption, the United States increasingly resembles an underdeveloped country.

In this way, the political recommendation offered in this manifesto is hypocritical, as it comes from those who created and still defend the deregulation of the North American financial system, an act that loosed a fiscal Dracula on the world economy. Indeed, the third main point of their manifesto states the desire to continue in this way: “Restructure regulation to end ‘too big to fail,’ improve credit availability to entrepreneurs and small businesses, increase regulatory accountability and ensure that all regulations pass rigorous benefit-cost tests.” At the same time, the Republican Party continues to oppose the weak financial regulations that the Obama administration has repeatedly tried to implement. All this amid the evident abuses in fund management, the granting of predatory housing credits to poor families, the manipulation of interbank rates in London and the laundering of drug trafficking assets through estimable financial institutions.

Laurence Kotlikoff, a professor at Boston University, says that the manifesto does a disservice to the economic profession. If economics is to be conceived as a science, its expert “scientists” cannot simply declare that all of Romney’s political propositions are good, while all of those executed by Obama are misguided. No unbiased economists would ever make such categorical claims. Yet those who signed the manifesto did so as professional economists and even specified the university or institution with which they are affiliated. The statements given in the manifesto represent political opinions, rather than scientific ones. Kotlikoff compares these economists to Paul Krugman (an Obama supporter) and Glen Hubbard (an advisor to both Bush and Romney), both of whom identify so closely with the political party with which they are affiliated that they make it impossible to differentiate where their political duties end and their scientific analysis begins.

The profession of economics has become corrupted, as shown in the documentary “Inside Job”: many notorious economists are being paid to serve the interests of private institutions, publishing biased, partisan findings and hiding their real results from the public.

All of this has profoundly discredited the field of economics. These economists have endeavored to hide the truth, rather than reveal it, undercutting the prime virtue that sets science apart from all the rest.