Economic advisors

I posted recently about who’s advising the president on economic matters. Don Boudreaux posted a link on Cafe Hayek to a column he wrote for the Pittsburgh Tribune-Review on why he declined a nomination from George W. Bush to serve on the president’s Council of Economic Advisors.

My conscience prevents me from taking such a position. I don’t judge others who took, or will take, such a post. But I could not have done the job that the administration invited me to do. That job is principally not to give economic advice. That job, instead, is to give credibility to political maneuvers.

Sure, on matters that aren’t politically charged, a president might sincerely seek and follow the advice of an academic “expert.” But being the U.S. president is a political job. And the chief talent and ultimate goal of all expert politicians is to win votes. At the end of the day, it’s the far-too-rare successful politician who will do what is right if doing what is right differs from what is most popular.

In the 30 seconds that I spent envisioning myself on the Council of Economic Advisers, I saw myself ricocheting between offering advice in private that would be ignored and being asked to defend in public many policies that I believe to be wrongheaded or even immoral. Such a job repulses me.

Consider Jason Furman, a very good economist who is now chairman of President Obama’s Council of Economic Advisers. The Washington Post, in a glowing profile of Mr. Furman, reports that in January he told attendees at a public event that over the past half century, “the economy itself had done nothing for the poor: Only government dollars had.”

Of course, such a claim is precisely what a “progressive” politician such as Mr. Obama wants voters to believe. But we have solid evidence that Furman himself doesn’t believe this claim.

One of Furman’s well-known research papers is his 2005 article “Wal-Mart: A Progressive Success Story” ( mackinac.org/archives/2006/walmart.pdf). He back then concluded that “(b)y acting in the interests of its shareholders, Wal-Mart has innovated and expanded competition, resulting in huge benefits for the American middle class and even proportionately larger benefits for moderate-income Americans.” In short, a major player in the private market had indeed done something — something wonderful — for Americans of modest means.

Can Furman’s 2005 conclusion be squared with his recent statement? Yes, but only with great effort. Perhaps he changed his mind or perhaps “the poor” he referred to last month somehow do not include anyone who shops at Wal-Mart.

The more plausible conclusion, however, is that, in political jobs, politics trumps truth.

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