College economics departments: A political enterprise?

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Economics departments around the country are getting a nasty dose of  the real world. In the past few months,  million-dollar donors of the Republican  Party have seized control of the Florida State University (FSU) economics program, and the University of Chicago  (UC) nearly assigned a fraudulent Goldman Sachs banker to teach the  discipline to undergraduates.

New College’s Economics  Department has also been in the process  of searching for a new faculty member  to add to their roster.

While such scandalous news  would be unlikely to come out of a New  College hiring, the role that money and  influence has played in recent decisions  made by top-ranked, highly-regarded  universities has been perceived by some
as deeply troubling.

In May 2011, top Republican Party  donor Charles Koch pledged $1.5 million  to the FSU Economics Department. In
exchange for the hefty donation, Koch’s  representatives were given authority  to screen and approve or disapprove  of any hires for a new program that goes by “political economy and free  enterprise.” The program was shaped by  Koch’s donation.

Such a development lacks historical precedent, and departs far from the  traditional relationship between donors  and universities.

“Traditionally, university donors have little official input into choosing  the person who fills a chair they’ve  funded,” Tampa Bay Times writer  Kris Hundley wrote in an article. “The  power of university faculty … to choose  professors without outside interference  is considered a hallmark of academic freedom.”

In the academic year 2011-2012,  Koch rejected a staggering 60 percent of  job candidates suggested by FSU faculty.
Rachel Maddow, speaking on the story late last year, said it was “objectively  insane” that the State of Florida has
allowed this to happen.

From 2007-2011, Koch and  his brother, David, spent more than  $30 million donating to hundreds of  universities around the country, with  similar quid pro quo relationships  established. At FSU, at least, the climate  has started to change.

“I didn’t actually know that this  had happened,” junior FSU economics  student Chelsea Colon said. “But it
makes sense. We’re not being taught  ridiculous Republican craziness or  anything, but our department has  definitely shifted rightward.”

Money can buy influence, but  as UC proved in late February, influence can also buy a job.

Former Goldman Sachs banker  Fabrice Tourre was the only person  found liable for committing fraud  before the financial crisis, and was  recently announced as a guest lecturer  for undergraduate students at the UC, in fulfillment of a requirement for earning  his PhD. Tourre currently owes the  Securities and Exchange Commission  millions in fees for his fraudulent activities.

Outrage sparked at publications  ranging from Mother Jones to Salon,  and a few days later on March 3 the  Chicago Maroon – the university’s  official newspaper – broke the news that  Tourre would not be teaching the course after all, and that his requirements could be fulfilled elsewhere.

The initial reports were not  inaccurate, as Tourre was slated on  course schedules and the school’s website  to lecture, and quotes provided by the  administration to the Maroon only  confirmed prior speculation. Whether  bad press or an alternative method was behind the school’s decision to remove  Tourre from the schedule remains to be  seen.

When asked about UC’s  initial decision, Assistant Professor  of Economics Tracy Collins, currently  vetting potential candidates to teach  economics here at New College, was  disapproving.

“You’ll see a lot of the top schools  have a lot of professors who consult for  these big banks,” Collins said. “How can
your program say ‘we’re teaching the  future of America and corporate world  ethics,’ but then ‘we’re hiring someone
who has questionable ethics?’”

The decision to take Tourre off  the roster was met with mixed reaction among the UC student body. Many expressed relief, but some lamented  the fact that an economist with deep  experience would not be instructing  them.

“I was hoping that with Fabrice  Tourre, it would be different than with  [other macroeconomics professors] in  the past,” second-year student Allan  Zhang said. “I guess I was hoping that  his experience in the private sector  and [investment] banking would add
something to the class.”

For Collins and the New College  economics faculty, their search began with a focus on content: hiring a “true”  macroeconomist with a focus on the  United States and an approach that did  not favor memorization and textbook- based learning.

“Sometimes you have no idea  how what you’re learning in class  can relate to the real world,” Collins  explained. “So we’re looking at someone  who’s interested in teaching students  how to think and see how macro is  occurring in the world today.”

Real-world application is an  idea both FSU and UC – not to mention  the many other schools looking to  controversial figures with deep pockets – are quick to cite when defending the  potential hiring of a fraudulent banker,  or authoritative position given to a  political heavyweight. Collins could only  warn that at New College, “We don’t  want to hire Bernie Madoff, either.”

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