Silly me. Here I thought the main reason that the economics profession had not only missed the crisis, but for the most part, gave the Fed a free pass on its colossal policy errors, was that everyone drank the same Kool-Aid, theory-wise.
It turns out that the Fed is not someone to cross, at least if you are a young academic. From Huffington Post:
The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found…
“The Fed has a lock on the economics world,” says Joshua Rosner, a Wall Street analyst who correctly called the meltdown. “There is no room for other views, which I guess is why economists got it so wrong.”
One critical way the Fed exerts control on academic economists is through its relationships with the field’s gatekeepers. For instance, at the Journal of Monetary Economics, a must-publish venue for rising economists, more than half of the editorial board members are currently on the Fed payroll — and the rest have been in the past.