Who’s advising the president on the economy?

If you guessed Jason Furman, you are the winner. He was appointed by the president as the chairman of the council of economic advisors. There was a recent article in the Washington Post claiming him to be the wonkiest wonk. Are we sure we want him to be advising the president on economic matters. Here is a tidbit from that Washington Post article

At an event late last month in Washington, Furman displayed a chart showing how food stamps and other social programs had lowered poverty dramatically over the past half century. This was a big success, he said.

But the graph also showed that the economy itself had done nothing for the poor: Only government dollars had. Here he stressed that the economy needs to work better, so people can enjoy higher incomes without relying on the government’s assistance.

“When a few of you are here 50 years from now to talk about the 100th anniversary of the War on Poverty, if they show a graph that looks a lot like that,” Furman told the crowd, “. . . we will have really failed as an economy and as a society.”

In an article he wrote in 2005 about Wal-Mart he claims

There is little dispute that Wal-Mart’s price reductions have benefited the 120 million American workers employed outside of the retail sector. Plausible estimates of the magnitude of the savings from Wal-Mart are enormous – a total of $263 billion in 2004, or $2,329 per household.2 Even if you grant that Wal-Mart hurts workers in the retail sector – and the evidence for this is far from clear – the magnitude of any potential harm is small in comparison. One study, for example, found that the “Wal-Mart effect” lowered retail wages by $4.7 billion in 2000.

It sounds like the economy has helped the poor. Here is a graph from Mark Perry on America’s War on Poverty.

I don’t really see the “help” government dollars have done for the poor.

Here’s a couple of blog posts if you want to read more from people who are smarter than me on their take of Furman…here and here.

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One thought on “Who’s advising the president on the economy?

  1. Pingback: Economic advisors | randomthoughtsbyrob

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