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.
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.