by associate contributor “GB”
The 2010 documentary “Inside Job” directed by Charles Ferguson very clearly illustrates a curious dichotomy in our public and government mindset regarding conflict of interest in the financial industry sector and the economics profession. The movie chronicles the longstanding tradition of top ranking executives from major Wall St Investment banks and brokerage houses assuming positions of power and policy in the public sector, e.g. Treasury Secretary, Chairman of the Federal Reserve, or Chief Economic Advisor to the President of the US, and then returning to their roles in the private sector. Indeed, nominations to cabinet posts of such individuals are commonly perceived as appropriate due on the impeccable qualifications of the individual. However, consider what the public reaction would be if the CEO of a major pharmaceutical firm, e.g. Pfizer, Merck, JNJ, etc. were to be appointed as head of the FDA, and then return to the Pharma sector! If such an event is inconceivable for the obvious conflict of interest involved, why is the analogous event in the financial industry not perceived in the same light? The consequences of the clear conflict of interest in the Financial Sector are witnessed by the economic meltdown of 2008, yet there are no efforts or movements in place to curb, or other similar policies regarding the movement of such individuals between public and private sector positions of influence in the financial industry. If Government regulation of certain industries, e.g. Pharmaceuticals, can be perceived as in the best interests of the public, why doesn’t the same apply to the financial, or energy industries, which routinely profit at the expense of the individual taxpayer?