Finance academics - Are they biased?

There has been significant blog traffic on the controversy concerning a NYT article on unbiased academic research and the connection between Wall Street and academics. The key argument is that some professors who have written on speculation, Craig Pirrong and Scott Irwin to be specific, are in the bag with Wall Street. Both have done work that has shown that speculation may not have a negative impact on prices. I have chosen by words carefully. 

I will not review their research work. The impact of speculation is very important topic that still needs to be analyzed. Do speculators drive markets? In general, the answer is no, but clearly there are times when speculative players will have an impact on prices. Anything to the contrary would be a poor understanding of market dynamics. The question is how can we identify those times and conditions.

What is important is to defend two very good thoughtful researchers who have had strong careers of trying to find the truth through numbers. I have known Scott Irwin for 25+ years and find him a true gentleman and careful scholar. If I had a student that wanted to do graduate work in agricultural economics, I would send him to Scott. I have tried to hire his students because they are well trained. If Scott writes something, I want to read it. I may not agree or like all of his research, but it is done carefully. 

I have been reading the work of Craig for over two decades. I have met him, but we are not friends. He is at the University of Houston where I formerly taught. He is the best economist on micro issues of futures markets, exchanges, and manipulation. I have traveled in the same circles with people who say they are part of the "Chicago School" of "fresh water" economists. If I could be of the same caliber as Craig with my work, I would be proud. He is beholden to one thing - the truth. 

Can there be biases in academic research and professors in the tank with Wall Street? Yes. It drives me crazy when academics pass themselves off as businessmen and walk between the two spaces. There are academics who want to pick the brains of people on the street, do research, and then try and monetize the work. Who are they representing? I have had academics pitch money management ideas and schemes with a small hedge funds but then whip out their university business card. Talk about conflicts of interest. 

This is not the case with Scott and Craig. I support their work and their integrity.