NewsWire: 1/8/21
- The NYT recently profiled Heather Boushey, a progressive Gen-X economist who is pushing for policies that reduce inequality. Boushey is in the vanguard of a rising generation of economists who are rethinking traditional economic models and are focusing on how economic power translates into social and political outcomes. (The New York Times)
- NH: Does it really matter who the president's economists are?
- Well in broad strokes, obviously. In 2018, Trump's Council of Economic Advisors (CEA), chaired by Kevin Hassett, released a report entitled "The Opportunity Costs of Socialism" which attacked the "socialist" ideas of leading Democrats like Elizabeth Warren (the word "socialist" appears 144 times). It's fair to say that no such report will be issued by Biden's CEA. But can we say anything more?
- As I've already pointed out, Biden's executive team is brimming with well-credentialed moderates from the best universities who could easily have served the Obama team or the Hillary Clinton team. Indeed, many of them did serve in one of the other. (See "Biden's Cabinet So Far: Diverse Faces, Old Ideas.")
- Ditto for Biden's economists. Biden's pick for Treasury Secretary, Janet Yellen, was of course Obama's pick for Fed Chairman in 2014. She isn't one of those Wall Street bankers who needs an economist to advise her. She is an economist. As a Fed board member back in Bill Clinton's first term, she made clear that full employment was her priority. That didn't change later after the Great Recession.
- Biden's pick for OMB, Neera Tanden, is not an economist--though OMB heads often are. Tanden was a wire-puller for Hillary Clinton's Center for American Progress, a well-heeled moderately progressive DC think tank.
- Biden's pick for head of his National Economic Council is Brian Deese. Again, Deese is not an economist, but then again that doesn't seem to be part of the job description anymore. From Robert Rubin in 1993 through Gene Sperling in 2014, every chief economic advisor in the White House was an economist. But Obama's last pick, Jeffrey Zients, wasn't an economist, nor were Trump's two picks: Gary Cohn and Larry Kudlow. Deese has worked at CAP, for Blackrock (on sustainable investment), for Hillary, and as a special economic adviser for Obama. In that role, progressives complain, he helped arrange the auto bailout and opposed large deficits.
- Last but not least, let's turn to the three-member CEA. As chairman, Biden has picked Cecilia Rouse, a top-ranking Princeton economist (her specialty is labor and human capital) and the first black American to head the CEA. Of interest: Her husband is the son of the late Toni Morrison.
- Biden's two other CEA picks are Jared Bernstein and Heather Boushey (boo-SHAY), both of whom have advised Biden personally for many years. Bernstein is a well-known progressive advocate for policies that would help low-income workers. He is a veteran of the Economic Policy Institute and the Center for Budget Policy and Priorities, two left-leaning DC think tanks.
- Boushey is founder and head of the Washington Center for Equitable Growth, yet another DC think tank that focuses heavily on remedying economic inequality. In 2016, Hillary Clinton chose her to lead her economic transition team. Now here she is again.
- Boushey (an Xer born in 1970) thinks of herself as leading "a rising generation of scholars, informed by new data and sources of empirical evidence, coming to conclusions that upend the conventional wisdom." That, at least, comes from her recent book, Unbound: How Inequality Constricts Our Economy and What We Can Do About It. I've read the book. It's a well-written overview of recent social and economic research, especially using behavioral economics and so-called "statistical natural experiments," that tends to justify the progressive agenda in everything from childhood nutrition and higher ed to infrastructure and antitrust enforcement--and much else.
- A full exposition of the policy reforms implied by the Boushey agenda are laid out in her think tank's agenda, Vision 2020: Evidence for a Stronger Economy. A milder version of this agenda--stripped of Boushey's more aggressive tax and antitrust initiatives--are outlined in Joe Biden's own economic agenda. A big push on childcare, infrastructure, minimum wage hikes, and tax hikes for corporations and the wealthy are definitely part of it.
- My advice is to watch Bernstein and Boushey to see how they are getting along with Biden's executive team. If they express dissatisfaction, you can regard that as a sort of early-warning signal that the Biden agenda is losing its progressive edge. Boushey especially appears to be a volatile personality with little tolerance for the unwoke. (See this fascinating story on a public fight between Boushey and another economist, Claudia Sahm, on Boushey's "abusive behavior" as a boss. It's an SJW "cat fight"--Sahm's phrase, not mine.) IMO, you'll know if Biden is backsliding when Boushey quits... and let's everyone know why.
