July 2 (Bloomberg) -- President Barack Obama sought advice on the economy from former Federal Reserve Chairman Ben S. Bernanke and Ronald Reagan adviser Martin Feldstein at a private White House lunch with mostly conservative-leaning thinkers.
“It’s not a coincidence” that the seven economists invited to the luncheon today were mostly considered conservatives, said White House Press Secretary Josh Earnest.
“He’s willing to consider new ideas,” Earnest said of the president hosting the luncheon. The economists, he said, “aren’t constrained by politics.”
The economy remains the top concern of Americans five years after the official end of the recession. Public dissatisfaction with Obama’s handling of the economy is running higher than on the eve of the 2010 midterm elections, which the president called a “shellacking” that cost his party control of the House of Representatives.
Unemployment rates and middle-class incomes haven’t recovered to pre-recession levels. The economy’s underlying weakness was underscored by a 2.9 percent annualized decline in the gross domestic product during the first three months of the year, though private forecasters predict growth rates above 3 percent for the remainder of the year.
Tomorrow, the Labor Department issues data on unemployment and hiring for June. The jobless rate was 6.3 percent in May.
Earnest didn’t describe the conversation at the lunch, which was still under way as he conducted his daily briefing with reporters. Obama hosted another group of economists for lunch on June 18, including Nobel laureate and New York Times columnist Paul Krugman and former Federal Reserve Vice Chairman Alan Blinder.
Expanding middle-class economic opportunities is the “top item” on Obama’s domestic agenda and he is “interested in having an ongoing conversation,” Earnest said. The president didn’t plan to use the lunch to lobby the economists to support his legislative agenda, he added.
Two of the economists invited, Robert Hall of Stanford University and Kevin Hassett of the American Enterprise Institute, said they had been asked to keep the conversation confidential. The others didn’t immediately return messages.’’
“All I can say is that we had a wide-ranging discussion of economic policy issues,” Hall said.
Hall was an early promoter of the “flat tax” on income later advocated by 1996 Republican presidential candidate Steve Forbes. Also present was Luigi Zingales, a University of Chicago Business School professor whom Foreign Policy magazine in 2012 named one of its Top 100 Global Thinkers “for reminding us what conservative economics used to look like.”
Zingales, according to the magazine, likens the U.S. to his native Italy because “they’re both reeling from crony capitalism.” He argued in his book “A Capitalism for the People” that the Republican Party under George W. Bush abandoned its pro-market principles to support big-business interests, including tariffs and tax breaks.
Another guest, Harvard University Professor Edward Glaeser, said in his book “Triumph of the City” that urban centers are engines for economic growth that spur innovation and sharpen talent through competition. He contends that zoning restrictions make it harder for people to afford homes and that a range of government subsidies promote suburban sprawl that damages the environment.
Another guest, Melissa Kearney, a professor at the University of Maryland and director of the Hamilton Project at the Brookings Institution, has done research on the impact of economic conditions and government programs on personal behaviors such as child-bearing.
To contact the reporter on this story: Mike Dorning in Washington at firstname.lastname@example.org
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