Not sought: Economists’ bright ideas for addressing the financial crisis

Maybe it was a case of the “not-invented-here” syndrome — the common phenomenon where organizations aren’t open to innovations or ideas they didn’t come up with — in Washington.  Or maybe it was just the pressure of time. But, whatever the reason, one thing that wasn’t included in the financial-sector bailout package that Congress passed was extensive perspectives from many academic economists, suggests an article in The Chronicle of Higher Education. Titled  “Washington Puts Academics on Sidelines in Bailout Plan” (subscription or day pass required), the article describes how academic economists drafted plans and working papers in response to the crisis — but many felt they didn’t have much influence in the debates over the bailout plan. On September 25th, one Senator did wave a petition signed by 200 academic economists skeptical of the proposed plan and the haste to pass it. Then, one of the petition’s signers who works in the Washington area was called in at the last minute to testify to the House Republican Policy Committee — on a Sunday afternoon.  But, overall, according to The Chronicle,  Congress’s attempts to reach out for academic counsel were “apparently sketchy and last-minute.”