On April 16th, I put up a video interview with Dr. Peter Linneman of the Wharton School on the sidebar. The interview was, well…. let me give a quote as an example:
There was never really a housing bubble, there were a couple of markets where supply just got wildly in excess of demand, and I don’t think people realized it, almost all of that was concentrated strictly in condo, where you had people buying residences to invest in, not to live in.
The interview goes on in that vein. After discounting the effects of overproduction during the boom, among other things, Linneman goes on to express his enthusiasm for homebuilder stocks, in fact naming several.
It is interesting to note that while Linneman has his own consulting firm–what is mentioned on the video is his association with the Wharton School. From the video, it is not clear if his investment advice has the sanction of Wharton. Should that make any difference? I suspect it might, given that most people would likely expect more objective and independent advice from a Wharton professor than, say, the chief economist of the National Association of Realtors.
The Wharton School of Real Estate is largely supported by industry interests. [See the list of their "members" here.] Like other university real estate study centers across the nation, they are funded by sponsors from the real estate industry. Another example is Harvard Real Estate Studies with their "Policy Advisory Board."
There is nothing nefarious about having real estate interests sponsoring real estate studies. Universities rely heavily on these sorts of sponsors for funding. However, it seems that as the public in general has the perception that "research" from a university should be independent and objective, universities have an obligation to uphold certain standards, in spite of the interests of their sponsors. This begs the question, is it really appropriate for a professor to use his position with an institution of higher learning to function as an industry cheerleader?
Here’s the video:
What do you think Doomers? Did Linneman cross the line here?
twist -
I’m really ambiguous about the Real Estate Department at the Wharton School of Business. They seem to be hopelessly tangled up with the The Samuel Zell and Robert Lurie Real Estate Center at Wharton. That being said, there seem to be some very good people working there. One of their profs is Susan Wachter, and she seems to be excellent, often being quoted [1] in the media. Like Wachter, Peter Linneman is a full professor in the RE department, but from the evidence of this video, he must be an embarrassment to his more academically sound colleagues and a menace to the department’s prestige.
Wharton is a bit weird. Their faculty is as unaccessible as the old Soviet Politburo; much less easy to reach than, say, the Banking analysts at the American Enterprise Institute (and they are the Politburo!) Their periodic analysis pieces posted on Knowledge @ Wharton, though usually anonymous (like The Economist) tend to be most informative. A Feb 21th post (old stuff requires free registration) in their Real Estate articles section may have been the first mainstream academia piece to note the tremors in the bond markets arising out of the subprime mess.
[1]: “‘Mod Squad’ goes to work: Lender is one of several scrambling to help struggling homeowners modify terms so they don’t have to foreclose.”, by Ellen Simon, AP / Daily Breeze, April 22, 2007.
Interesting, apparently he subscribes to the theory of “If I say there isn’t a bubble… there isn’t a bubble”… I mean EVEN Lereah admits there’s froth, overbuilding, softness and declines in prices (even though he downplays them and continues to cheerlead), but this guy talks as if he LIVES in a bubble.
I don’t have a problem with that interview.
The interviewer was the one who brought up his credentials and association with Wharton and Linneman seemed to be speaking for himself, not on behalf of the school.
I had a much different reaction to Retsinas and the Harvard JCHS, probably because the Center published its documents ostensibly under the auspices of the Harvard School of Economics.
Having hit on the key, I must admit that it is indeed possible to dig up the e-mail address of a Wharton professor. If you can find a PDF format journal article on the Wharton site, it will list the author’s business e-mail. The pattern is pretty standard, and by googling your guess, you not only confirm the validity of the address, you’ll also pick up a couple of the desired prof’s articles.
John-
Thank you for the Wharton info- I’m glad they aren’t all out to lunch.
NVMike-
Every time I’ve been interviewed, I’m always asked how I would like to be introduced- so I’m assuming they gave Linneman the same option.
I taught undergraduate classes and worked in the herbarium at BYU while I was a graduate student there. I was also a researcher in the botany department at UC-Berkeley after I graduated. [If you ever want an interesting cross-cultural experience, try graduating from BYU on Friday, and starting work at Berkeley on Monday!]
It was clear to me as I dealt with students and members of the community, that people put a lot of trust in what I said as a consequence of my academic associations. I quickly learned that a casual opinion could be construed as absolute fact.
It’s true not everyone holds academics in that high a regard, [myself included] but enough do that I learned to be careful. I talked to enough people who probably didn’t remember my name, but did remember my university affiliation to think that there are people who will follow Linneman’s advice because of his position.
I personally think a little more emphasis on his consulting, and a little less on Wharton would have been appropriate.
“This begs the question, is it really appropriate for a professor to use his position with an institution of higher learning to function as an industry cheerleader?”
Is it possible that he’s actually saying exactly what he thinks? Maybe he is objective and independent and has just come to a differenct conclusion than you and I.
Yes, I also disagree with him, but that doesn’t necessarily make him a shill for the REIC. Let’s thoroughly tear apart his analysis and leave argumentum ad hominem to the folks on TV.