Sunday, October 14, 2012

The go-go economist

The NYT features a profile of Glenn Hubbard, “Romeney’s Go-To Economist.” Hubbard is still dean of the Columbia business school, and can well become Secretary of the Treasury if Romney somehow sails into the White House. Once there, he would likely seek to revive George W. Bush’s economic policy, i.e., return the US to the economic course which once led it to the precipice. Otherwise, Hubbard looks like another nerdy libertarian economist who passes for a “conservative,” American-style. He has not shrunk from raking in millions from industries whose practices he has justified in academic papers and articles; and from corporations and executives accused of fraudulent behavior, in whose defense he has readily provided “expert” testimony.

This is all highlighted in the NYT article, with some colleagues calling Hubbard a “mercenary” and describing his managerial style as “Brezhnevian.” I have a sense, though, that this new attempt at character assassination won’t fair much better than the previous one, by the makers of Inside Job (which is also mentioned in the article). I guess Professor Hubbard has only one eventuality to worry about – the likelihood that, after all this worldly success, he may at some point burn in hell.

Meanwhile, there is a different word of caution coming from Cynthia Freeland on the op-ed pages of the NYT. She has chronicled the rise of the “new global elite” (dubbed the “cognitive elite” by the Economist staff) in a popular article in the Atlantic, and in a subsequent book. She now argues, on the basis of some historical analogies, that “the 1 percent” are pursuing a policy of “self-destruction” by gobbling a disproportionate amount of the country’s GDP; and by making sure that only their kids receive the extreme academic preparation needed for entry into the Ivy League schools (or smuggling them in as “legacies” when they still fail to shine). Of course, Hubbard and his likes (on both sides of the political divide) would respond that the strategies which appall Freeland are just normal human responses to a particular incentive structure; and they have little use for historical analogy.