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Wall Street Lackeys in the Academy

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As a historian, I don’t really have an opportunity to sell out by using my professional positions to provide expert testimony for Wall Street. But I wonder what that would be like. Evidently, it buys you a really nice home. And there are plenty of academics willing to become complete hacks.

And in a squat glass building on the University of Houston campus, a measure of the industry’s pre-eminence can also be found in the person of Craig Pirrong, a professor of finance, who sits at the nexus of commerce and academia.

As energy companies and traders have reaped fortunes by buying and selling oil and other commodities during the recent boom in the commodity markets, Mr. Pirrong has positioned himself as the hard-nosed defender of financial speculators — the combative, occasionally acerbic academic authority to call upon when difficult questions arise in Congress and elsewhere about the multitrillion-dollar global commodities trade.

Do financial speculators and commodity index funds drive up prices of oil and other essentials, ultimately costing consumers? Since 2006, Mr. Pirrong has written a flurry of influential letters to federal agencies arguing that the answer to that question is an emphatic no. He has testified before Congress to that effect, hosted seminars with traders and government regulators, and given countless interviews for financial publications absolving Wall Street speculation of any appreciable role in the price spikes.

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.

While his university’s financial ties to speculators have been the subject of scrutiny by the news media and others, it was not until last month, after repeated requests by The Times under the Freedom of Information Act, that the University of Houston, a public institution, insisted that Mr. Pirrong submit disclosure forms that shed some light on those financial ties.

There are lots of examples of academics becoming lackeys of industry. I recently discussed the Johns Hopkins black lung program almost completely controlled by one faculty member who denied nearly every single black lung claim, forcing thousands of people to spend their last days in miserable poverty.

Of course, one doesn’t have to support progressive positions. But taking corporate money in exchange for your expertise and not disclosing it is about as immoral as it gets.

Kudos to the Times for taking on this subject.

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