September 27, 2008

Academic concerns

The initiative of the Graduate School of Business of the University of Chicago to send to the Congress a letter signed by about 200 academics / economists expressing their opposition to the $700 billion government bailout plan to rescue Wall Street bankers is a noteworthy step as a sign that the academic community becomes vocal in an important social and economic issue. The traditional but mainly the online media have given already a lot of publicity to the epistle; Republican lawmakers and others opposing the bill are using it as an argument against the move of the administration to solve the crisis. I am afraid though that in the end the academics' petition will not help much since other heavyweights like Warren Buffett took position in support of the bailout.

Whether one agrees or disagrees with the letter - signed by some high caliber colleagues from different prestigious schools – I would suggest that such initiatives should not be isolated incidents. What for example is such a petition was drafted in cases that governments lie to their people, misbehave, violate legal and ethical standards or turn a blind eye to situations like the one that caused the present crisis. For sure some of the esteemed colleagues were aware of the sub prime mortgage scandal that caused the property and credit crunch. What if they had raised the red flag earlier by sending a similar petition warning about the consequences of this practice to the Congress or the US government and take care for some publicity. This would have made the present intervention much more worthy, consequent and maybe more effective.