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Joe Stigilitz, shamelessly used ....
A new study backed by pro-business groups takes a harsh stance on rules intended to bring transparency to the $600 trillion derivatives market. The report, published on Monday, claims that proposed regulation could cost 130,000 jobs and could cut corporate spending by $6.7 billion.
The findings are clearly meant to scare politicians and drum up public support — just as financial regulators are set to testify on the issue before a Congressional committee on Tuesday. And at first blush, the study would seem to be good ammunition for the Chamber of Commerce and its other supporters.
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.
“This is the first I have heard about it,” said Mr. Stiglitz, who just returned home on Sunday after a five-week trip abroad. He said he was surprised to be listed on the group’s Web site. After reading the study, he said, “It’s not a very good report.”
Some of the firm’s other so-called advisers must have agreed with him.
As I made calls about the relationship between Keybridge and the academics, names mysteriously disappeared from the group’s site on Monday. By the end of the day, Keybridge’s list of affiliated advisers had shrunk to four, from seven.
When I called Keybridge’s president, Robert F. Wescott, who during the Clinton administration was a special assistant to the president for economic policy at the National Economic Council, he seemed slightly startled.
“It is true that David and Steve asked to be removed from the Web site,” he said. “These professors did not work on this project and were not aware of it, but they helped us with other projects.”
Mr. Stiglitz said he had done “some work” for Keybridge, but not for a while. “The last thing I did for them was in May 2009.”
“This is not any kind of research. This is people who want to overleverage and risk the system — because, once again, they will get the upside and taxpayers/all citizens get the downside,” Simon Johnson, a professor at the Sloan School of Management of the Massachusetts Institute of Technology and a senior fellow at the Peterson Institute for International Economics, wrote on his blog. (Mr. Johnson also contributes to the Economix blog of The New York Times.)
Mr. Stiglitz was even more adamant, saying the study’s conclusions encouraged the equivalent of “free fire insurance,” in that companies could protect themselves from commodity price swings without paying up. “The argument they make is particularly foolish,” he said. Mr. Stiglitz also said the argument seemed ludicrous in light of corporate America’s already stingy ways: “Companies are sitting on $2 trillion of cash. It’s just an embarrassment that they’d use that argument in the current context.”
Mr. Laibson and Mr. Zeldes both said in e-mails that they just learned about the report on Monday and were not advisers to the firm. The Chamber of Commerce did not return a call for comment.
(you gotta love the snail trail defense that's spread below)
He also contends that Mr. Laibson and Mr. Zeldes were distancing themselves as a result of “what happened with the movie ‘The Inside Job,’ ” not the study. “That’s how it was presented to me,” Mr. Wescott said.
The movie, which focuses on the financial crisis, raises questions about economists and their consulting arrangements with big business. Shortly after the film’s release, the American Economic Association voted to establish a special committee to create a professional code of conduct.
Or . . .
When I told Mr. Wescott of Keybridge about Mr. Stiglitz’s comments, he replied that “the client had asked us” to put the report together. “It was a hypothetical study.”
http://dealbook.nytimes.com/2011/02/.../?ref=business