business

Gossip Sure Beats Gnp Stats

Disneyland was just around the corner. But when the American Economic Assn. assembled in Anaheim, Calif., on Jan. 5 for its three-day annual meeting, the talk turned to Washington, some 3,000 miles away. That's because, after more than a decade of feeling ignored by Republican Administrations, the leading lights of economics now figure that they have a shotat returning to policyprominence.

Still, the heady whiff of power at the AEA conference was joined by dismay over the Clinton Administration's early appointments. The choice of Robert E. Rubin and Robert B. Reich, two noneconomists, for top economic posts was bad enough. But what really got the economists' juices flowing was Clinton's choice of University of California at Berkeley's Laura D. Tyson for chairwoman of the Council of Economic Advisers. Tyson, a trade expert who favors government intervention to spur competitiveness, has been faulted for lacking strong macroeconomic skills.One of her critics has been Massachusetts Institute of Technology's Paul R. Krugman, himself rumored to have been in line for the slot. At the meeting, he averred that the CEA has been downgraded steadily over the past two decades--adding that "I've made enough enemies in the last few weeks, proving that politics is definitely not my game."

Krugman and the others in Anaheim may take comfort in the expected selection of Princeton University economist Alan S. Blinder for the No. 2 spot. They expect Blinder, a solid macroeconomist who has been a BUSINESS WEEK columnist for seven years, to be a counterweight to Tyson. Some at the meeting dismissed the griping as sour grapes. "People were just indulging in a lot of unjustified pettiness," says one economist.

WHISPER, WHISPER. Tyson and Blinder didn't show up in Anaheim--which only seemed to fuel the gossip. Indeed, Lawrence H. Summers of the World Bank, another potential nominee, packed the room for a luncheon speech on Jan. 5. He looked uncomfortable when reference was made to his failure to secure a CEA seat.

At times, the ongoing seminars seemed to be a sideshow to the Washington job saga. Indeed, the meeting's most popular pastime was guessing who would land the third CEA spot. Mentioned as candidates were Paul L. Joskow of MIT and Alan J. Auerbach of the University of Pennsylvania. And there was speculation that Summers might be in the running for some Administration post. If those economists don't get the call, there were many others in Anaheim who seemed willing and eager to receive a summons to Washington.

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