I remember the first time I encountered Spy magazine. It was at Cody's Bookstore in Berkeley. One of the articles attacked Bill Cosby. Wow! I thought. You don't see that every day.
Which is why Inside Job, which won the Oscar for long documentary, is so important: It attacks prestigious professors at Harvard and Columbia and to some extent the institutions themselves. You don't see that every day. Larry Summers, former Harvard president, is one of the main villains of the piece. Few intellectuals have combined poor understanding and power as much as Summers has. (With bonus points for nauseating treatment of staff.) Perhaps none has done so much harm. Had Summers not blocked Brooksley Born from regulating derivatives, the world would be a different place. And it isn't just Summers. The movie shows that John Campbell, chairman of the Harvard economics department, has trouble understanding the concept of conflict of interest. What this says about Harvard, the most prestigious academic institution in the world, is not something Harvard professors are going to want to think about. Harvard, of course, is the home of Joseph Biederman, the most ethically-challenged professor I know of.
Michael Moore's Sicko did a great job of provoking outrage. At the same time, however, it was empty of interesting thought. It was not a new idea that American health care might benefit from imitating other countries. So the outrage boils away unused. In contrast, Inside Job contains the beginning of a thoughtful critique: It says that economics professors were corrupted by all the money they could make praising and doing the bidding of Wall Street (e.g., resisting regulation). Summers made out especially well. You won't find this critique in The Big Short, All The Devils Are Here, Too Big to Fail, or How Markets Fail. A viewer of Inside Job might stop giving money to Harvard until Harvard enacts conflict of interest rules for economics professors.
I don't think conflict of interest is the whole problem with Summers et al. Poor understanding is a big part of it. A friend of mine at Berkeley took introductory economics. What about data? I asked her. Where's the data for all these assertions? She went to her professor. Where's the data? she asked. Don't worry about data, he said. Economics professors have started paying more attention to data (Steve Levitt, John List), but they have a long way to go.
