Inside Job and b-school disclosure

Finally got to see Inside Job, Charles Ferguson’s documentary about the financial crisis. It’s terrific and should be on the curriculum at every business school.

The final 20 minutes or so are devoted to the failures of academic economists to predict the crisis, or even come down on the banks afterwards. Ferguson, rightly I believe, attributes this to the economists’ eagerness to receive consulting gigs with banks. His interview with Glenn Hubbard, Dean of Columbia Business School is devastating. Here’s where Hubbard goes from Jekyll to Hyde.

It seems so obvious that economists and business school professors should have to disclose their consulting arrangements. I cannot see a single, reasonable argument for them not to. If our economic health really does depend on their ideas, and much of it does, then we deserve to know what goes into shaping them. If they wish management to be treated as a profession, then they should abide by the codes of doctors and lawyers in disclosing any potential conflicts of interest.

Which brings me to Michael Porter and Libya. I’m a great fan of Porter’s work generally  – though his most recent HBR cover wasn’t so hot – and his history advising Libya doesn’t change that. I’m sure part of him wishes he had never taken up the invitation from Gadaffi and his son. But his work is in helping countries which could use his advice. These tend to be places with serious problems of every kind. As long as he’s open about this, which he was, then I see no problem.

2 thoughts on “Inside Job and b-school disclosure

  1. Peter Baxter

    President Obama the slave of Wall Street. Why?

    Put simply bad debts where sold as triple A investments when people who sold them knew they were bad debts. They insured themselves against any loss. Paid by the borrower, and they pocketed all the money paid out by the insurance companies for the subsequent losses.
    This is the biggest scam in the history of the world.
    No one has been brought to Justice for this their punishment was to be rewarded with tax payers money and massive bonuses.

    An estimate is that these Bankers spent over 10% of their considerable incomes on vice including drugs and prostitution and this was all paid for by their companies on company credit cards and I think if the serious crime squads worldwide seek the truth we can still get some justice from these crooks remember it was tax evasion that brought down Al Capone.

    President Obama came to power promising to bring these villains to justice so far he has just reappointed the people who were in financial power under Bush and it is just more of the same.

    President Obama has become the slave of Wall Street. Why?


  2. Paul Phillips

    Hi, just started my MBA at Manchester business school and we watched this film for our first economics lecture. Really interesting but shocking at the same time, you realise some of this stuff has gone on but not to this extent with the academics. Makes you think. Also really enjoyed your book. Keep up the good work.


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