For Top Economist, Obama Chooses an Actual Economist
As first reported by Bloomberg yesterday, President Barack Obama is expected to choose Jason Furman, currently the deputy director of the National Economic Council, to be the next Chairman of the Council of Economic Advisors. This is a hopeful sign that the administration will engage more productively on economic policy for the next three years.
Furman is a bit of a hybrid pick: He's an economist with a Ph.D. from Harvard, but he's spent most of his career working in think tanks, political campaigns and the government. That combined resume positions him well. Unlike most academic economists, he understands how policy gets made, and he'll likely be able to make the council more effective at influencing policy.
And it's about time: Over the last five years, I've been frustrated to watch Obama's economic team because less and less, well, economic. Most of the big-name Ph.D. economists who played top policy roles early in the administration have left: Austan Goolsbee, Christina Romer, Lawrence Summers and my Bloomberg View colleague Peter Orszag. As a result, Obama has been getting more and more of his economic policy advice from non-economists such as Treasury Secretary Jack Lew, former Treasury Secretary Timothy Geithner and National Economic Council director Gene Sperling.
The economists' voices have, I think, been missed. Early in the administration, Romer and Summers pushed for more aggressive fiscal action to stimulate the economy but lost out to a Geithner-led faction that wanted to make deficit reduction the priority. With Romer and Summers gone, Team Geithner got stronger, the White House turned its attention away from jobs and toward a fruitless search for a deficit-shrinking "grand bargain," and the job of stimulating the economy was left entirely to the Federal Reserve.
The administration has, at least implicitly, capitulated to the view that the public debt, rather than high unemployment, is our most important economic problem. Liberals like to blame Republicans for ignoring the jobs crisis, which they are, but it hasn't helped that the Obama administration shares the premise that we need to focus on cutting the deficit now. Obama even placed an austerity measure -- expiration of part of the Bush tax cuts -- at the top of his fiscal cliff agenda.
As Bloomberg's Hans Nichols noted, Furman has been a voice for fiscal stimulus within the administration. That doesn't mean simply that he's on the administration's left flank; look, for example, at the defense of Wal-Mart he wrote for Slate in 2006. He's on the right side of the big fiscal and regulatory issues and a strong candidate to help the administration craft a credible economic growth agenda.
Finally, a housekeeping note: As Furman is preparing for a new job, so am I. This is my last post for Bloomberg View. I have been thrilled to write here for the past year, which has been an extremely exciting time in U.S. economic policy. I wish all my colleagues the best.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.