Economist-bashing has been a popular sport lately, with current criticism coming from the left.  Paul Krugman weighed in with a long piece in the New York Times, and now the Huffington Post has an article claiming that the Federal Reserve has quashed research critical of its policies by spreading around lots of money and prestige.  HuffPo doesn’t pull its punches, so the article opens with:

The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.

If regulators can be accused of regulatory capture when they look out for the interests of the industries they regulate, I guess this would be an accusation of ‘academic capture.’

Similar criticisms sometimes surface in Accounting.  For example, Shyam Sunder wrote in 2006 “Access to the ears of princes rarely helps either the scholarship or the authority.”  FASB is, of course, far less generous to academia than the Fed, but people who accept criticisms of the Fed are likely to be skeptical of FASRI.  Personally, I think such skepticism is to be encouraged.  We at FASRI work hard to maintain our independence, and we welcome criticism of FASB (not just particular standards, but their general world view and decision-making processes as well).  But working with FASRI and FASB provides benefits, and incentives can distort thinking.

Still, I think standard setters and academics are both better off if the former provide enough support to attract the attention of the latter, who tend to be a pretty independent and cantankerous lot.