Former White House economists who last week wrote to Congress, urging it to pass “fast track” trade approval did not disclose their ties to companies that stand to benefit from increased global economic integration.
Six former chairs of the President’s Council of Economic Advisers failed to note their personal interests–in multinational corporations, financial institutions, and consultancies–in their message to lawmakers, The Huffington Post reported on Friday afternoon. Two of them had previously been criticized for failing to disclose conflicts of interest in a high-profile documentary.
In signing the letter, Michael Boskin, Glenn Hubbard, Austan Goolsbee, Laura Tyson, and Martin Baily all noted only their academic affiliations. Boskin is an Exxon Mobil director and an Oracle Corp. vice chair. Hubbard is on the boards of MetLife and KKR Financial—the latter is a global investment firm. Goolsbee is a parter at 32 Advisors, which The Huffington Post described as a company “that helps international and domestic clients enter and expand in global markets” and “hoping to expand drone applications to agriculture as well as the oil and gas industries.” Tyson is an adviser to Samsung, and sits on the boards of AT&T and Morgan Stanley. Baily advises the Albright Stonebridge Group, a firm advises public-private partnerships in Western Europe, Latin America and the Middle East.”
Alan Greenspan, also a former chairman of the Federal Reserve Board of Governors, did note he represented Greenspan Associates, but made no mention of its clientele and its interests.
The letter specifically called on lawmakers to pass fast track in order to approve of both the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP).
“US businesses will enjoy improved access to overseas markets, while the greater variety of choices and lower prices trade brings will allow household budgets to go further to the benefit of American families,” the message claimed.
Despite the fact that many experts would disagree with that point, legislators are currently unable to determine its credibility for themselves. As The Sentinel has noted on a number of occasions, Congresspeople and Senators are currently forbidden from examining the working draft of either agreement.
In recent years, the problem of academic economists failing to disclose corporate ties was brought to the fore in “Inside Job,” a 2010 Oscar-winning documentary on last decade’s global financial collapse. In one part of the film, Director Charles Ferguson detailed how former Fed Governor and Columbia University economist Frederic Mishkin failed to be forthright about receiving money in 2006 from the Icelandic Chamber of Commerce to write a paper on Iceland. Mishkin’s analysis was laudatory.
“Many people with whom I have spoken about this question think that it actually had a significant role in worsening Iceland’s bubble, which was already very bad when he wrote the paper,” Ferguson said. Iceland’s economy collapsed in 2008, in spectacular fashion.
In “Inside Job,” Hubbard–a Bush era advisor who had, in 2004, praised mortgage-backed securities and credit default swaps–refused to disclose those who pay for his consulting services. The film also discussed Tyson, and how she took a position at the University of California in Berkeley while accepting seats on the AT&T and Morgan Stanley boards.
“Prominent economists are now routinely paid to testify in antitrust cases, criminal trials, and regulatory proceedings; to testify in Congress; to give speeches to the industries and firms they study; to serve on boards of directors and as advisors; and to write supposedly objective analyses of industries, companies and policies,” Ferguson wrote in a Reuters column, explaining the issue. “These payments and the conflicts of interest they generate are rarely disclosed, except when required by Federal law.”
Tyson, Goolsbee, and Baily responded to The Huffington Post, claiming that they only noted their academic ties because the research institutions are “their primary employer.” The trio and Greenspan denied having opinions on trade influenced by clients and multinational corporations. Hubbard and Boskin did not respond to The Huffington Post’s requests for comment.
