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February 23, 2020 at 10:20 am

Vedder in Forbes | Are University Policy Experts Good For Society?

Dr. Richard Vedder, portrait

Dr. Richard Vedder

Dr. Richard Vedder, Distinguished Professor Emeritus of Economics at Ohio University, wrote a column at Forbes headlined “Are University Policy Experts Good For Society?

All this reminds me of a personal involvement in the policy realm. In December 2008, in the midst of the financial crisis, I testified before the Joint Economic Committee of Congress with such illustrious university based economists and sometime government officials as Larry Summers (Harvard professor and president who was Secretary of the Treasury) and Alan Blinder (Princeton professor once vice chair of the Federal Reserve Board), as well as Robert Rubin, former leader at Citigroup and Goldman Sachs and also Secretary of the Treasury.

All this group of illustrious experts testified that economic recovery from the financial crisis would be mightily helped by a large economic stimulus package—at least $800 billion. Only one witness, me, from relatively obscure Ohio University, disagreed. I said my reading of the historical and theoretical evidence suggested the stimulus program would have little or no positive effect.

A month later, with Barack Obama in office, the stimulus package of almost precisely that magnitude was swiftly adopted. The chair of the Council of Economic Advisers, Christina Romer, before and after that appointment a professor at the University of California at Berkeley, stated that if the stimulus program were adopted, the unemployment rate would not rise above 8%. It promptly rose above 8%—for 43 consecutive months, the longest bout of prolonged unemployment since the Great Depression. The “experts” were mostly wrong.

Read his entire column in Forbes.

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