Tuesday, August 30, 2011

Say Hello To The New Guy

This new guy seems like he will be a force for good:
As President Obama just announced, Princeton Professor Alan Krueger is his pick to be the next Chairman of the Council of Economic Advisers. Will Krueger’s background in labor bring a fresh perspective to the table? Or will he too be stymied by business as usual? Roosevelt Institute Fellows weigh in.

“At a time when the economic and political hurricane in Washington appeared to cause all people with any economic training or talent to evacuate the administration, it is welcome news to see that Princeton economist Alan Krueger has joined as the head of the Council of Economic Advisers. He is a fine economist with government experience at the Treasury and the Labor Department and he should be very familiar with the people and practices of government. There are no issues more important to address than the persistent and devastating high levels of unemployment, and Krueger’s academic strengths are ideally suited to meet the challenge. Dr. Krueger has also done a great deal of work on the economics of popular music. One hopes that he can change the tune of austerity that is currently a hit in Washington D.C. and refocus our nation on the need to eliminate the tolerance of so many idle resources.” -Senior Fellow Rob Johnson

“I think the choice of Krueger is great, but a little too late. He’s well respected across the ideological spectrum within the mainstream economic discipline, and he’s generally a liberal economist, concerned about issues of economic and racial inequality, and not zealously anti-labor. (In fact, he’s probably slightly pro-labor.) He’s not a Krugman or Stiglitz or Sachs politically, but he’s not far behind them. His work has been important in debunking right-wing ideology about the effect of the minimum wage. In fact, one of the most important studies of his career may be a highly influential paper and book he wrote with David Card using a ‘natural experiment’ of a minimum wage increase in New Jersey and not Pennsylvania to empirically assess whether or not an increase in the minimum wage had an adverse affect on unemployment, finding it did not. The method and evidence used were of the highest and most cutting-edge within the discipline, forever changing the debate. -Fellow Dorian Warren

“It’s good to have a highly competent labor economist running the place. He has long been concerned with unemployment, wage stagnation, and inequality. Whether he can break through the political wall at the White House is another question.” -Senior Fellow Jeff Madrick
There have been other non fuck up economists in the administration, but they were never in actual positions of power and were shut down by those above them (Summers and Geithner). Since it seems increasingly clear that Geithner is running the show I'm skeptical he can make much of an impact, but at least Obama hired someone who seems to understand that propping up insolvent banks isn't the solution to our economic problems.

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