Academic research of all kinds receives funding from a variety of sources. Does the money taint the research? That is a complicated question that sometimes deserves to be asked. But this hit piece by David Kocieniewski in the New York Times, titled “Academics Who Defend Wall St. Reap Reward,” is a disgrace.
Kocieniewski attacked two economists, Craig Pirrong and Scott Irwin, who have argued that “speculators” do not drive up commodity prices. Pirrong and Irwin teach at public universities, which means that their emails, etc., can be obtained by FOIA requests. Kocieniewski tried to use such sources to smear them. About Pirrong, he wrote:
What Mr. Pirrong has routinely left out of most of his public pronouncements in favor of speculation is that he has reaped financial benefits from speculators and some of the largest players in the commodities business, The New York Times has found.
And about Irwin:
One of the most widely quoted defenders of speculation in agricultural markets, Mr. Irwin of the University of Illinois, Urbana-Champaign, consults for a business that serves hedge funds, investment banks and other commodities speculators, according to information received by The Times under the Freedom of Information Act. The business school at the University of Illinois has received more than a million dollars in donations from the Chicago Mercantile Exchange and several major commodities traders, to pay for scholarships and classes and to build a laboratory that resembles a trading floor at the commodities market.
Felix Salmon analyzes the Times hit piece here:
[I]n this case Kocieniewski has missed the mark. Neither Pirrong or Irwin is mendacious or venal, and indeed it’s the NYT which seems to be stretching the facts well past their natural breaking point.
Salmon points out that Kocieniewski’s revelation that the Chicago Mercantile Exchange has contributed more than a million dollars to the business school at the University of Illinois is entirely irrelevant, since Irwin teaches at the School of Agriculture and Consumer Economics:
This is real jaw-on-the-floor stuff. The NYT has published an article about how academics who write nice things about Wall Street “reap rewards”, in the words of the headline — and its main illustration is donations to a business school where the academic in question doesn’t even work!
All in a day’s work at the New York Times, America’s least reliable news outlet.
As for Pirrong, he defended himself ably against Kocieniewski’s smears on his own web site:
[C]ompletely contrary to the impression in the NYT piece, the vast bulk of my consulting and testifying work has been adverse to Wall Street and commodity trading firms. Virtually none of this work relates to the alleged subject of the NYT story: the impact of speculation on commodity prices. In fact, much of this work relates to market manipulation (which is distinct from speculation) by commodity traders. I have been, and continue to be, on the side of plaintiffs in attempting to hold traders who abuse markets accountable for their conduct.
The failure of David Kocieniewski to point out this salient fact alone betrays his utter unprofessionalism and bias, and is particularly emblematic of the shockingly shoddy excuse for journalism that his piece represents.
Moreover, none of the research or writing I have done on the speculation issue received financial support from any firm or entity with even a remote stake in this issue. I started writing about this on my blog in 2006, and have been arguing this issue on my own time with no financial support from anyone. Unlike, say, Ken Singleton (whom I admire immensely and am not accusing of anything remiss) I have not written any commissioned research on the subject of commodity speculation. My work that has been done with firms that are connected, in some way, to commodities trading has been on subjects unrelated to financial speculation, and/or with firms that are not financial speculators, and/or took place well after my opinions on the subject were a matter of public record, including in national publications like the Wall Street Journal. Therefore, to suggest some connection between my paid outside work and my opinions on speculation is misleading, deceptive, and plainly libelous.
True to my Chicago School roots, I believe this is a data issue informed by a strong understanding of the theory and empirics of commodity pricing-a literature to which I have made many peer reviewed contributions. And I have been open and remain open to reviewing any data on any market. I further note that the vast bulk of other research on this subject, undertaken by world-class scholars including James Hamilton and Lutz Killian supports my conclusions (and those of Scott Irwin). Ironically, considering the where this piece appears, even Paul Krugman is in agreement.
So the Times piece was a typically shoddy piece of politically-driven propaganda.
But the main point I want to make is somewhat different. The Times and other left-wing commentators are quick to assume that any connections between academics and private enterprise are somehow suspect. But how about the government? Every sentient being knows that the federal government, in today’s world, is just another interest group–the biggest, most powerful, and often most sinister interest group of them all. How about academics who take grant money from the government? Are they not tainted and corrupt?
The obvious examples are the global warming alarmists who have received billions of dollars in subsidies from the U.S. government. Climate alarmists are swimming in cash because they produce “research,” which is often merely a bad joke, that supports the federal government’s desire to assert more power over the American economy and your own life-style. Will the Times do an expose on, say, Michael Mann? Will they send a FOIA request to Penn State and scrutinize Mann’s emails? Will they draw an invidious connection between government money and the conclusions that climate alarmists conveniently assert, even though they are scientifically absurd? Will David Kocieniewski author an article in the Times titled, “Academics Who Defend Federal Government Reap Reward?”
Just kidding. The linkage between politics and “journalism” is now complete. In a corrupt rag like the New York Times, it is pointless to look for anything other than political advocacy.