Matthew Yglesias » On The Left Hand

Dec 5th, 2008 at 12:28 pm

On The Left Hand

Jared Bernstein, a first-rate guy with what I’d say is a clearly more left-wing orientation than the members of the Obama economic team that have been announced thus far, was just announced for the new position of Chief Economist and Economic Policy Advisor to the Vice President. It’ll be interesting to see what kind of influence that post holds. At a minimum, if the president wants to get someone on the phone who’ll criticize Summers/Geithner from the left they’ll know where to call.

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Filed under: Economy, Transition,

30 Responses to “On The Left Hand”

Why oh why Says:
December 5th, 2008 at 12:35 pm
Just how many types of “Chief Economist” will this White House have?
Why oh why Says:
December 5th, 2008 at 12:43 pm
And for that matter, where are Stiglitz and Krugman? They’ve been right about the economy a lot more than anyone else selected so far, especially Summers.
Dan Kervick Says:
December 5th, 2008 at 12:50 pm
Nothing confuses me more about our government than the bizarre and constitutionally unwarranted set of arrangements that have evolved around the Vice Presidency. Why does the Vice President of the Unite States need an economic policy adviser, chief or otherwise?

The Vice President in our system is not an “assistant president”, no matter how many schoolkids or constitutionally uneducated adults continue to make this assumption. The Vice president has only two jobs: to preside over the Senate and occasionally cast a tie-braking vote there; and to take the oath of office and assume the presidency if the President is incapacitated. Otherwise, he has zero legitimate role in governing this country.

Who let the dogs out here? Isn’t it time to put the Vice President back in his constitutional kennel?
Steven Attewell Says:
December 5th, 2008 at 12:54 pm
Well it’s a good sign; hopefully, he’ll be VP’s rep on the NEC or similar groups.
Mary Says:
December 5th, 2008 at 12:58 pm
Dear Matt:

Please do something to get Andrew Sullivan to stop talking about economics. He is a disgrace to Harvard. Thank you in advance.
JohnH Says:
December 5th, 2008 at 1:12 pm
Dan Kervick: “Isn’t it time to put the Vice President back in his constitutional kennel?” Well, no. There’s no reason to dismantle the cabinet either on the grounds that it has no constitutional status.

We’re not talking about the vice president abrogating unconstitutional power, in the sense that Bush himself has done so with torture, spying, signing statements, and (less unique to him, alas) Congress’s designated war powers. We’re talking about someone in the president’s inner circle acting on best advice in order to give his best advice. Would you rather the role go to the president’s press officer or someone akin to Karl Rove?

We’ll have a vice president, and I see no reason not to make better use of his talents than simply having him resign his seat in the senate and wait for Obama to pass away. One reason I voted for Clinton in 1992 was that, for all his centrism, he had a running mate whose liberal stances on the environment and other issues I’d admired.
bobbo Says:
December 5th, 2008 at 1:23 pm
“if the president wants to get someone on the phone” or the press? Two very different things.
Tim McG Says:
December 5th, 2008 at 1:29 pm
I will ignore my first impulse to think that this is simply a meaningless sop to ‘all them crazy liberal blogs’ to have em stop bitching about people like Geithner and Summers, and instead to just say, WOOT!

I only wish that it was like back in the day of Old Europe and Bernstein could get some kinda big medallion or badge to wear on all those terrible CNBC panel discussions where he vivisects Steve ‘Douchebag’ Moore.
gcochran Says:
December 5th, 2008 at 2:05 pm
If economics were a science - that is, an organized body of knowledge that had predictive value - then why would it matter whether a given economist was left or right, anymore than it matters whether a chemist is? If we could find an economist whose predictions came true more than others - more than chance, say - he could presumably tell you that a certain amount of action X would produce a certain amount of consequence Y. Essentially, isn’t that all an economist could ever have to offer? At best?
Why oh why Says:
December 5th, 2008 at 2:17 pm
Well, economics is not a science. Neither are foreign policy or national security; yet all of those areas are certainly important in politics. So it makes sense to have experts advising the executive branch.

The problem seems to be that Obama is stuck in the 90’s and only listens to former free-market fundamentalists of the “Washington Consensus”, as long as they have the label ‘Democrat’. Perhaps a side-effect of teaching at the University of Chicago for so long?
kforceone Says:
December 5th, 2008 at 2:33 pm
Dan at #3, unfortunately you’re wrong. The VP is in fact an “Assistant President”, if the President is so inclinde to allow. It seems that Obama has a role for Joe that is more than lap dog, but less than what we have right now. I’m okay with this, no need taking a skilled pol like Biden out of the Senate just to mute him in a ceremonial post.

I’m not sure why this so upsets you.

k1
Barbar Says:
December 5th, 2008 at 2:46 pm
Larry Summers is not a free-market fundamentalist. For example, his academic work has included the following:

-Debunking the “turnover” view of unemployment, which argued that the welfare cost of unemployment was relatively low because unemployment tended to be brief
-Contradicting the “intertemporal substitution hypothesis,” the idea that labor market fluctuations can be explained by people voluntarily withdrawing from the labor market under certain conditions
-Generally showing that the labor market is not well-explained by neoclassical principles: when employers pay efficiency wages in excess of a worker’s opportunity cost, it becomes possible for raising the minimum wage to improve aggregate welfare, involuntary unemployment is possible, and governments may be justified in intervening in particular industries; moreover, he found evidence that efficiency wages exist and that efficiency wage models are appropriate
-Arguing convincingly that the stock market is not efficient; he showed that typical statistical tests of the “random walk hypothesis” were not strong enough to disprove it, found both empirical evidence and theory in support of this view
washerdreyer Says:
December 5th, 2008 at 3:54 pm
Kervick, why do you think the constitutional minima for what the Vice-President’s job can be has to be his entire job?
johnleemk Says:
December 5th, 2008 at 7:50 pm
Barbar:

Just to build on your point, very few economists are market fundamentalists. They may think the market often works best at solving society’s problems; that doesn’t mean they think the market is always right, let alone that there is never a role for government to play in the economy. The ravings of Paultards and right-wing talking heads are hardly related to the thinking of most economists. Most right-wingers take economists’ conclusions and twist them into something that the economic evidence doesn’t merit.

And for what it’s worth, a lot of “progressive” ideas are not good economic policy, and generally even someone like Stiglitz or Krugman would be more inclined to agree with the economic consensus than the progressive ideal. Have a look at some of the columns Krugman wrote for Slate in the 1990s - his support for free trade and markets is consistent with the economic evidence out there, and in fact his work on trade is what he won the Nobel Prize for.

The reason so many different schools of thinking exist in economics is not that they disagree radically on how the economy works. It’s that they have different interpretations of the same data and findings. Moreover, because economics is a social science, it is hard to experiment and see how altering one variable changes everything else. When you do stumble on a novel way of experimenting, you get something sexy like Freakonomics - otherwise it’s boring statistical models, which inherently have some unreliability (they’re only as good as the data they have) and do need some interpretation.

For example, the Chicago school looks at markets and says “markets work - let’s use markets.” The Harvard school looks at markets and says “markets fail - let’s use government.” And some economists (sometimes called the GMU school, comprising a number of popular economics bloggers like Tyler Cowen) say “markets fail - let’s use markets.” But although these disagreements sound vast to the layman, in reality economists agree more with one another than they do with the layman. For instance, when economists speak of market failure they are saying that markets sometimes fail - not that they always fail.

Moreover, most policy proposals from serious economists don’t involve radical changes in the government’s role in the economy. Often, they involve more sensible ways to conduct policy - for instance, Milton Friedman argued that the negative income tax is the most efficient welfare policy because it gives the impoverished the greatest possible degree of freedom for the same resources, and distorts the overall economy the least. Subsidies on essentials are often misdirected attempts to help the poor, and most economists can agree that it is better to just put money directly in their wallets (which is why Hillary Clinton’s and John McCain’s proposal for a gas tax moratorium had no traction at all with any real economists).

Economists have heated disagreements with one another, it is true. But ultimately, they still have more in common intellectually than they do with the typical voter. I don’t worry too much about appointments to a politician’s economic staff because most academic economists are not partisan hacks, and although they heatedly disagree on arcania and a few big picture problems, on most basic policy issues, they are in agreement. What I do worry about is whether the politicians actually listen to their economic advisors.
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On The Left Hand

30 Responses to “On The Left Hand”

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