Archive for Frederic Mishkin

Financial Crisis Actors

Posted in FILM, Politics with tags , , , , on May 25, 2018 by dcairns

What follows is an extract from INSIDE JOB, the excellent documentary by Charles Ferguson on the 2008 financial crisis. Since so few of the truly guilty bankers and regulators choose to appear in the film, the dean of Columbia’s business school, R. Glenn Hubbard kindly steps forward to assume to role of villain. This is slightly disingenuous of him since his part of the film’s argument is at best a sidebar: narrator Matt Damon talks about how banking abuses have not only nearly destroyed the world economy, but corrupted even the teaching of economics.

Even within this small section of the film, there are more obvious antagonists. Frederic Mishkin has already come to the audience’s attention for his (disastrous) role as a Federal Reserve board governor. It transpires that he published an article entitled Financial Stability in Iceland, without disclosing that the piece was funded by the Icelandic Chamber of Commerce. Also, after Iceland’s economy abruptly went down the salerni, the article appeared on Mishkin’s CV as Financial Instability in Iceland. Economists make brilliant prophets, as long as their prophets only refer to things that have already happened.

But, ladies and gentlemen of the jury, look at Mishkin —He’s so affable, so professorial! His downward smile when he ruefully suggests that his self-serving alteration of a paper’s title is a mere “typo” is so charming! His only brief moment of surliness is when he declines to state how much the Icelanders paid him. ($124,000, not even a half-decent NDA’s worth, although at least the Icelandic Chamber of Commerce don’t insist on physically fucking you, just ethically.)

Mishkin looks bad, certainly — but he convincingly blurs the line, at least sometimes, between hapless incompetence and outright corruption. You feel you should hate him, but your anger isn’t as intense as by rights it ought to be. He has charm.Hubbard is doing fine until things turn against him, at which point he inexplicably decides that the best policy is to be a huge swinging dick on camera. I think “They’ll never use this!” must have been going through his mind. However much he knows about business, he clearly has no understanding of documentary. “Give it your best shot,” sneered through a pugilistic expression, is cinematic gold.

Hubbard was chairman of the Council of Economic Advisers under George W Bush, which already sounds ominous. Still, in early comments in the film he seems mild, reasonable, a model of probity. We wait eagerly for him to be smeared with the filth of his own intellectual dishonesty. Asked if there’s a conflict of interest problem in the discipline of economics, he at first doesn’t understand the question. Then he catches on and argues that most economic educators aren’t “wealthy business-people,” which I would think might make them more prone to temptation. Matt Damon, our friend and humble narrator, cuts in and says that Hubbard makes $25,000 a year from the board of Met Life.

Hubbard takes the high ground: everybody should disclose if they do have any financial conflict regarding a topic they’re weighing in on. “But if I recall, there is no policy to that effect?” inquires the interviewer. “I can’t imagine anybody not doing that,” says Hubbard, with Great Seriousness. “There would be significant professional sanction for failing to do that.” It’s here that the clip begins, with the interviewer pointing out Hubbard’s outside activities mainly consist of consulting and directorship for the services industry. And Hubbard’s immediate reply is that those jobs AREN’T LISTED on his C.V. Like, that’s his defense.

And then it all kicks off. Enjoy!

It’s just really interesting to see someone confronted with something about themselves that might look bad, and NOT taking the opportunity to even attempt to clear his name, just expressing snarling resentment that he’s been found out. This middle-aged business professor isn’t really a convincing tough guy, but there’s no denying his ferocious hostility to any suggestion that he ought to be accountable for his actions.

Footnote: I can’t find any suggestion that Hubbard has faced any “significant professional sanction.” Instead, all we have is the clip above, which will live with Hubbard all his life and hopefully play on a loop on a video screen embedded in his tombstone so passers-by can see what kind of individual lies beneath the sod.

Footfootnote: having enjoyed and been horrified by INSIDE JOB, I then watched THE BIG SHORT, hoping to understand the terminology better. I’ll write that one up next.