UMKC’s Econ Department has the ear of public policy makers
That was certainly the case last month, when respected economists from around the globe were invited to the United Kingdom’s Parliament. The Financial Governance for Innovation and Social Inclusion workshop brought together economists whose work focuses on financial reform and innovation.
UMKC Economics Professor Randall Wray, along with UMKC Visiting Distinguished Professor Jan Kregel, were natural choices for the workshop. That’s because when public policy makers talk about the economy, they want to be surrounded by experts who can spot a financial crisis before it hits a boiling point.
A few years ago, when the 2008 recession hit, the UMKC Department of Economics received a sober, well deserved nod of respect. Their decade of predictions had been right all along.
“Everyone else was saying, “Everything’s great! We’ll never have another recession.” We were one of the only voices out there saying that it wasn’t true. We argued that we were building up financial imbalances and that eventually, the whole thing would collapse,” Wray remembered.
Then the recession hit.
“Now people listen to us. All over the world, people know of our department. They want to hear from us because we see things differently than most other economists.” Wray said.
The department has a history of going against traditional approaches to economic theory in favor of Modern Money Theory. For the past several years, members of the economics department have seen their media requests, presentation requests and audiences grow. Most recently, department Chair Stephanie Kelton presented to the Harvard Kennedy School of Government. Bill Black, an associate professor with joint appointments in Economics and Law, is arguably the most frequently interviewed faculty member at the university. In the past few weeks alone, Black has discussed the Volcker rule on a German radio station, was profiled in a two-page spread for a Brazilian economics newspaper, and discussed antitrust fines on European and U.S. banks on CNN, to name a few. Although it seems the group is constantly interviewed by major media outlets, the department’s five-page article in Playboy Magazine remains by far the most memorable media placement. A PDF of the article is available on slideshare.net.
The importance of this heightened profile isn’t lost on the department. As Wray reflects on his time in Parliament, and his trip the previous week to Washington D.C., he says that presentations like those put UMKC’s ideas in front of some of the world’s most influential people: Public policy makers. With their ear, the UMKC Department of Economics has a better shot of shaping policy that serves the public, increases accountability, and, hopefully, creates a more stable system.
That concept of stability and preparedness drew several nods and murmurs of agreement when Wray discussed the issue in Parliament.
“To reform this system, we need to understand it,” Wray said. “To reform the financial system, we must understand its nature today, the nature of the global financial crisis, the nature of the crisis response, and – most importantly – what a financial system ought to do. We then formulate a reform to ensure that the financial system serves a public purpose, that it can be managed, and that it can be rescued when it inevitably faces crisis again.”
The workshop on Financial Governance for Innovation and Social Inclusion brought together international economists working on issues related to “Reorienting Financial Reform” and “Re-shaping Financial Institutions for Innovation and Development” – under the Reforming Global Financial Governance initiative of the Ford Foundation.