Economic Staffing, Then and Now
I thought this response by Greg Mankiw to this post by Paul Krugman was appropriate but incomplete. Appropriate, for the simple reason that Krugman is taking pot shots at those who served in the Bush Administration without any reference to evidence. Incomplete, for the equally simple reason that Mankiw has many more economists to consider in his comparisons where he does try to provide evidence.
Mankiw includes Larry Summers in his comparisons, recognizing that as Director of the NEC, he will coordinate all of the President's economic policy. Who were the directors of the NEC under President Bush?
The only Ph.D. in the group is Larry Lindsey, but he is not registered for the service that compiles the list. Friedman was an investment banker, Hubbard was a businessman, and Hennessey was a former NEC deputy director and a well regarded Capitol Hill staff veteran.
Greg also includes Austan Goolsbee in his comparisons. Austan is being nominated to be a member of the CEA, not its chairman. Who served as member but not chairman of the CEA under President Bush?
All of them have Ph.D.'s, but none of them have registered with the service that compiles the rankings. That doesn't mean they are not good scholars, but it does mean that we should hardly fault the Obama team for having two CEA members ranked in the top few percent of all economists who have registered.
Other things equal, we would like to have the most professionally well regarded people serving in the administration. But it is not just having them in the administration -- it is having them in the right positions. Larry Summers at the NEC is extremely important -- more so than all of the other comparisons we could make.
Given the way the Executive Office of the President was structured while I was at CEA, it seemed like the NEC position has more influence than the CEA position. A lot of it had to do with proximity -- the NEC director and deputy director are in the West Wing and their staff were in the Eisenhower building. The CEA chairman had an office in the Eisenhower building but spent most of his time two blocks away at 1800 G Street, where the other members and all of the staff were located. Of course there are phone and e-mail, but the drop-by visits (particularly among the staff working late and under deadlines) that are essential to making sure that the policy work is being done well don't happen as often. One of the best things President Obama could do would be to invite the full CEA back into the Eisenhower building, even in less space than they had before they were relocated in the post-9/11 crunch for space.
The Best and the Brightest?
So you're buying into Mankiw's delusion that his metric is reasonable, and we should not try recruiting, say, people who have actual policy/government experience (since Mankiw's list of Republicans combined had less experience than Summers alone does, despite dominating the Executive Branch since 1968)?
Good luck with that one. Likely to get us deeply involved in an Asian War and excessive deficit spending.
A Reasonable Metric
The metric is reasonable for comparing the scholarly work of economists who received their doctoral degrees at roughly the same time. Austan is much younger than the other economists on Greg's list, so his lower ranking overstates the gap between his research and the others'.
You did read the whole post, right? Particularly the part that says, "Larry Summers at the NEC is extremely important -- more so than all of the other comparisons we could make."
Economists, not ideologues
It's not the lack of "scholarly" PhD economists that got us into this mess. It was the overpopulation of hidebound ideologue economists. When "free market can do no wrong" is the mantra, it doesn't matter how many papers they've written and published to give the illusion that they know something useful . . . these guys were all riding the same ship into the storm, and they were happy to be there. None of them questioned the massive over leveraging on Wall Street, funky derivatives (created by other PhDs, in disciplines like Physics), or the folly of credit default swaps gone wild. These guys were just fine with removing the uptick rule in the markets, and allowing illegal naked shorting. Running up an obscene federal debt? No problem! Their rich friends were making lots of money . . . what's not to like? They abetted the policies of this administration.
The free, totally deregulated market was going to take care of everything . . . what a joke.