The Federal Reserve has essentially bought out the economics profession, writes Ryan Grim in a Huffington Post investigation. The Fed employs or contracts with so many economists that it's a "career liability" for any independent-minded one to criticize policy, writes Grim. This might explain why the Fed has largely escaped criticism from academics for failing to see the current recession coming.
“You can say well, they’re reaching out, canvassing a broad range of talent,” says one economist. Or you can say “they’re essentially using taxpayer money to wrap their arms around everybody who’s a critic.” The Fed also maintains tight ties with academic journals, which determine who rises through the ranks and which ideas are considered respectable. At the Journal of Monetary Economics, for example, every editorial board member is a former or current Fed employee.