Economist takes issue with NYT article quoting him
Originally published August 27, 2014
An economist who was quoted by The New York Times in a recent article about how Wall Street profits from congestion in transmission markets has said his comments were misinterpreted.
SNL Financial reported Monday that Frank Wolak, professor of commodity price studies in the department of economics at Stanford University, took issue with the Aug. 14 article in the Times. The newspaper article was cited in the Aug. 25 Public Power Daily.
Wolak said his comments, which were made in April, were "taken completely out of context," reported SNL Financial.
"It seems inappropriate, at best, for a journalist to use a quote from almost four months ago, a quote discussing a hypothetical situation, and apply it to a specific set of circumstances in the future," said Wolak in a letter responding to the Times piece. He said the focus of his remarks was on how traders "in fact benefit market efficiency and can reduce costs to consumers."
Wolak recalled telling the Times reporters that any scheme by traders using financial transmission rights (FTRs) to raise consumer costs would not be sustainable because those traders would be driven out of the market by entities that provide value-added services. "Competition among traders provides strong incentives for them to serve the interests of consumers," he wrote.
"It is unfortunate that [the authors] decided to present a one-sided view of the activities of traders and, from my point of view, even more unfortunate that they decided to take my quotes completely out of context," Wolak said. "A balanced discussion of the role that traders play — both in improving market efficiency and reducing consumer costs as well as in the potential downside they discuss — may not make as sensational a story, but it is far closer to the truth."
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