Obama: ISO Economists

By :: June 9th, 2011

In 2008, Barack Obama brought an all-star squad of centrist and center-left economists to the White House. Now, as he confronts a critical turning point in the economy and his own political career, he can barely field a team.

Much as I hate to admit it, politicians need economists, especially in campaign season. Their most important job may be to talk their bosses out of doing things that make for terrific sound bites but turn out to be very stupid in the real world. Yet, Obama is kicking off his reelection and trying to balance demands for economic growth and deficit reduction without a single economist in a top policy position.

Obama’s initial team included such powerhouses as National Economic Council head Larry Summers and budget director Peter Orszag (a Tax Policy Center alumnus), who brought both academic chops and a wealth of Washington experience to their jobs. Christina Romer, Obama’s first Council of Economic Advisers chair, is one of the nation’s top scholars of the Great Depression (Fed Chair Ben Bernanke is another).  Romer’s successor, Austan Goolsbee, was not only a top-shelf academic economist at the University of Chicago but, more important, had earned Obama’s trust well before the president moved into the White House.  Goolsbee announced his return to Chicago this week. The others have been drifting away all year.

Today, Obama’s remaining senior economic advisers are NEC chief Gene Sperling and budget director Jack Lew, as well as Treasury Secretary Tim Geithner.  While Geithner has a master’s in economics, his real expertise was in international finance. As chairman of the New York Fed, he specialized in the care and feeding of Wall Street. 

Sperling and Lew, while wise in the ways of Washington, are both lawyers. There is nothing at all wrong with lawyers. Some of my best friends are lawyers. But lawyer brains are wired very differently from economist brains. It is something like cats and dogs. They both do what they do quite successfully, but see the world in very different ways.

In part, Obama’s dearth of economic advisers is not for lack of trying. I know a handful of top-notch academics who have turned down offers, mostly because they were unwilling to face an increasingly ugly confirmation process. Most recently, Nobel Prize winner Peter Diamond withdrew his name from nomination as a Federal Reserve Governor in the face of implacable GOP opposition.    

And, of course, plenty of good economists continue to serve the Administration in either career or mid-level political jobs. CEA’s Katharine Abraham and NEC deputy Jason Furman come to mind. But they don't get enough face-time with the Big Guy, and it is essential for any president to hear for himself that that brilliant-sounding idea cooked up by the campaign team is doomed to fail. And, right now, Obama needs more senior economists who can deliver that unpleasant but necessary message.

5Comments

  1. Michael Bindner  ::  9:53 pm on June 9th, 2011:

    He needs someone who can get by Shelby. Of course, if he hired Graetz and Bartlett, Shelby would still obstruct.

  2. Ralph H  ::  8:30 am on June 10th, 2011:

    Perhaps if any of these economists had a useful program they would still be here. The unemployment problem is most acute for those who have HS or less education. They are suitable for limited types of work, The administration has promoted high tech clean industries and education which have a slow payback. With the housing bubble burst, the source of a lot of work is gone for a long while. Perhaps the CCC or WPA type projects can help these folks. Anything that provides a positive change in the infrastructure is preferable to paying people 2 years of unemployment. At the same time we should provide incentives for high tech immigrants to settle here in hopes they become future business owners and help long term growth.

  3. AMTbuff  ::  4:42 pm on June 10th, 2011:

    Why did none of the brilliant advisers tell him that third party payment of health care was the root of the spending explosion? Maybe some less credentialed advisers will have a firmer grasp of reality.

  4. Eileen  ::  5:02 pm on June 10th, 2011:

    Face it. The economy is just really messed up. It’s going to take a long time for it to get better, no matter what Obama does. If the people choose to elect the Republicans next year, guess what. They won’t be able to do any better.

  5. Curly  ::  7:36 pm on June 10th, 2011:

    The captain is responsible for his ship even when he is not the pilot. Now if the ship hits something and starts to sink the rats on the ship will leave it. That it seams to be what is happening.
    I don’t know if the advisers gave Obama bad suggestions to follow or Obama gave bat orders of what he wanted for has advisers to follow but in either case the advisers see that is advisable for them to leave either to allow Obama to get another advisory team together before the election season gets started.