The Obama Administration’s revolving economists door has swung open again as Austan Goolsbee resigned as Chairman of the White House’s Council of Economic Advisers. Goolsbee stated he had to get back to the University of Chicago before he loses tenure (Larry Summers used that excuse as well). The nominee for the new Chairman is Alan Krueger. Perhaps like me you were hoping instead for Freddy Krueger with his slashing wit. Alas, no. Dr. Krueger is a professor at Princeton specializing in labor economics. The thought is that he would know how to get people back to work.
I can assure you that the good professor will be one of the worst economics advisers to our President. Perhaps even worse than Christina Romer. Maybe not as bad as his mentor, Larry Summers. Generally most economists specializing in labor econ are quite liberal in that they wish to employ the full power of the government to achieve their goals. Perhaps I am just prejudiced against labor economists by pigeonholing him. I know; it’s unfair. But from a quick review of his CV, I can find nothing to change my mind.
His credentials:
Harvard University, Ph.D., Economics, 1987
Harvard University, A.M., Economics 1985
Cornell University, B.S., Industrial & Labor Relations, with Honors, 1983
______________
Bendheim Professor of Economics & Public Policy, Department of Economics and Woodrow Wilson School,
Princeton University, July 1992-present.
Assistant Secretary for Economic Policy, U.S. Department of the Treasury, May 2009-November 2010; Chief
Economist, U.S. Department of the Treasury, February 2009-November 2010.
Assistant Professor of Economics & Public Affairs, Department of Economics and Woodrow Wilson School,
Princeton University, 1987-1992.
Chief Economist, U.S. Department of Labor, August 1994 – August 1995.
What struck me was his testimony before the Senate in support of a National Infrastructure Bank:
To summarize, a strong economic case can be made to increase our infrastructure investments and to accelerate those investments to put people back to work, to partner more with the private sector in funding infrastructure projects, and to take benefits and costs into account in allocating infrastructure investments. The creation of a National Infrastructure Bank would be a major step toward achieving these goals.
OK, it was his job while working for Treasury, but I can assure you that none of the things he advocated would revive the economy and put people back to work. The Japanese did quite a bit of this in their various attempts over the years at Keynesian fiscal stimulus and got nowhere other than the highest level of debt to GDP of any advanced economy. (Krugman said they just didn’t spend enough money.) Also, the other part: where is the money coming from? Surely not more borrowing? It’s just another boneheaded idea from a desperate Administration and now the guy has the ear of the President.
Arnold Kling does a good job of debunking the myth of government created job growth in this Cato Policy Report. http://www.cato.org/pubs/policy_report/v32n5/cp32n5-1.html
I expect more of the same from Mr. Krueger. Another Harvard man. It seems to be a common thread they all share. Keynesians, that is.
You, too? Of course got can create jobs. Easy as pie. Ditch digging brigades at $100/h for millions. Then ditch filling brigades. And repeat. Jobs are easy.
To claim otherwise is plain ignorant.
The cause of the mire we are in isn’t unemployment.so it’s hardly the solution.
Government can create jobs. But can untreated wealth?
I expect more precision from you, Jeff.
Not sure what you are saying. Why would I advocate a Keynesian solution?
sorry, fat finger syndrome on first post. You can delete this one and the first. Tablets suck for typing.
I’m not trying to convince you to promote Keynesian ideas, or else I have one less place to read economic analysis. My point is that the argument that the Government cannot create jobs is silly. Or better yet, my point is that the whole debate about job creation as a goal of economic policy is silly. The goal of economics is not to work, but to have more of the things we want. While that does require work, work is not an end in itself, it’s a means to an end. So, the fact that you even let yourself be sucked into the discussion of what may or may not put people to work is infuriating. Government can easily create jobs for millions by next week. What government cannot do is create wealth. That’s all I’m saying. That’s all that should be said.
I’m peeved at your statement “I can assure you that none of the things he advocated would revive the economy and put people back to work.”
It implies to me that you equate ‘putting people back to work’ and ‘reviving the economy’ is equivalent. Maybe I misread you, but that what it sounds like to me. Now, that would not make you sound any different from anybody else, but that’s why I’m peeved.
It’s a bit like when I criticize you for using the word ‘inflation’ sloppily to describe price inflation. That’s all. Maybe I’m off the track here, but that’s my take.
Keep on doing what you are doing otherwise. And happy to see your blog is becoming a real success reader-wise. It always was a success for me :)