Sept. 10 (Bloomberg) -- President Barack Obama said he’s appointing Austan Goolsbee to lead the Council of Economic Advisers, calling him “one of the finest economists in the country.”
“He is someone who has a deep appreciation of how the economy affects everyday people,” Obama said at a news conference in Washington today. Goolsbee has been a member of Obama’s team of advisers since the presidential campaign.
Goolsbee replaces Christina Romer, who is leaving her post to return to teaching at the University of California at Berkeley.
As a sitting member of the council, Goolsbee, a former University of Chicago business school professor, doesn’t require a Senate vote, allowing the administration to avoid at least one confirmation battle in Congress tied to its economic policies.
Goolsbee, 41, will be one of four principal members of the president’s economic team looking for ways to add more jobs to an economy with an unemployment rate of 9.6 percent. He’ll join National Economic Council Director Lawrence Summers, Treasury Secretary Timothy Geithner and, potentially, Jacob Lew, who is scheduled for a Senate hearing later this month on his nomination to replace Peter Orszag as head of the Office of Management and Budget.
Clashing With Summers
“With the economy still in recovery, the president will look to him for advice on policies to spur economic growth and job creation, while also being mindful of the challenges posed by the federal budget deficit,” said Michael Greenstone, director of The Hamilton Project, an economic-policy research group in Washington.
Goolsbee clashed with some members of Obama’s economic team, including Summers, during the administration’s intervention in the automobile industry last year. Last month, he said the administration needed to be “mindful” about the possibility of a new economic slump.
“I don’t think we will have a double-dip recession,” he said on Aug. 30 on CNN. “But it’s -- clearly anybody should keep their eye on that.”
Goolsbee also serves on the president’s Economic Recovery Advisory Board, headed by former Federal Reserve Chairman Paul Volcker.
Dispute Over Trade
During the 2008 presidential campaign, Goolsbee was criticized after meeting with officials from Canada’s Chicago consulate, who concluded that then-candidate Obama wasn’t planning to reopen the North American Free Trade Agreement.
Goolsbee assured the Canadians that Obama’s campaign promise to re-examine the trade arrangement was “more about political positioning than a clear articulation of policy plans,” according to a March 2008 memo, written by a Canadian official that later became public.
Then-Senator Hillary Clinton, Obama’s opponent for the Democratic presidential nomination, seized on the memo and it may have helped her win the Ohio primary, where job losses were a major election issue.
Even some of Goolsbee’s former critics said he is a good candidate to head the CEA.
“Austan’s efforts on the campaign and during the first two years of the administration make his appointment long overdue,” said Douglas Holtz-Eakin, who was the top economic adviser to Republican Senator John McCain of Arizona during the presidential campaign. “But Obama’s misguided and dangerous economic philosophy is so deeply entrenched that I don’t see much that he can really accomplish at this point.”
Leading the CEA is often a stepping stone to other economic positions, including those on the Federal Reserve.
Fed Chairman Ben Bernanke served as CEA chairman for President George W. Bush before he was appointed to lead the central bank. Janet Yellen, the current San Francisco Fed president and Obama’s nominee to be the Fed’s next vice-chairman, served under President Bill Clinton.
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