Free Markets, Free People


Harsh Words For Politicized Economic Advisers

Richard Epstein, writing in Forbes, has some very unkind but deserved words  for President Obama’s panel of economic advisers and specifically, Christina Romer.

The recent “upbeat” news is that the level of unemployment has leveled off at about 10% after its earlier climb this year. And just what has been the role of his professional advisors in the sorry performance of the last 10 months? To tell, it appears, the president exactly what he and his political advisors want to hear.

He points to Romer’s recent WSJ editorial:

Exhibit A is Christina Romer’s recent Wall Street Journal column, “Putting Americans Back to Work.” Romer heads the president’s Council of Economic Advisers. Her column rates as a bit of transparent propaganda that belongs in a fan magazine, not a serious newspaper. If she wrote it of her own volition, she should be fired for economic incompetence. If, as seems more likely, the White House wrote it for her, or told her just what to say, she should resign in protest.

If, over the past 10 months, you’ve had the growing feeling (or realization) that we’re now into politics 2.0 and the entire administrative organization is committed to propagandizing and politicizing everything, I’d say you’re right. Oh certainly past administrations have been guilty of some measure of that, but not to the level we’re seeing it now – to the point that it is so obvious that it must be commented upon by usually dispassionate economic analysts.

For instance, Epstein says:

Her column contains nine awestruck references to presidential omniscience and benevolence. Its opening sally places all the blame on the Bush administration, by claiming that Obama took office at “the height of the worst downturn since the great depression.” Funny that she failed to mention the tumultuous events of September and October 2008 had cooled off before then. Nor, of course, did Obama “stop the economic free fall” in those tempestuous autumn days, unless Moses also parted the Red Sea.

Worse still, she blindly celebrates Obama’s worst economic blunders as his greatest triumphs. The $787 billion stimulus package in the American Recovery and Reinvestment Act was a bust. Its protectionist “Buy American” provisions remain a perpetual irritant to international trade. The warped Cash for Clunkers program created a short bubble via a massive public giveaway, while doing nothing to help the environment.

Why, one might ask, with all these supposedly farsighted maneuvers on the books, does the president still face a “weak” employment market? Romer offers no explanation for how Obama’s wise decisions made matters worse. Instead she hyped Obama’s inconclusive meeting with various community leaders that took place the next day.

Or, as he says, propaganda and cheerleading. Is this what we expect from so-called economic experts advising the president? Is there any wonder that unemployment stands at 10% after these same advisers told the president that the “stimulus” would hold it at 8%?

Why aren’t they, instead, advising the president to do those things that government can do that actually would spur employment? Is it because they are as political as the rest of the administration? If not, why would competent economists address unemployment like this:

High on its agenda was an investigation of public-private partnerships that could, at best, only usher in yet another round of economic gimmicks. No credible economist could think that “direct incentives of homeowners to retrofit their homes to improve energy efficiency” could place a dent in the ranks of the 15.4 million unemployed. Far more likely is a replay of the older story: subsidies for these programs sop up wealth and thus kill sensible job opportunities elsewhere.

Or, playing to the political agenda even when it is ineffective in doing what really needs to be done – square peg/round hole.

What they ought to be saying the president is either being left unsaid or being ignored. The reason will be obvious:

You can only improve labor markets by freeing them up. Scrap the talk about goofy ad hoc subsidies, and tell the president, for the first time in his life, to think hard about deregulation. Roll back the three recent minimum-wage increases that have blunted job creation for low-skilled workers in a stagnant labor market. Announce he will veto any effort by Congress to pass the Employer Free Choice Act, whose uncertain threat of compulsory unionization has prompted many businesses to shelve any plans for expansion. Abandon the monstrous health care bills winding through Congress, whose panoply of taxes, subsidies and regulations are job killers of the first magnitude. Put a halt on legislation for carbon caps and taxes until the science gets sorted out. Don’t let the EPA make a hasty endangerment finding on carbon dioxide.

Deregulation costs nothing to administer, increases jobs and adds to the tax base. It is only an added benefit that sound economics reduces presidential power.

Those are all things government can do now, and, they’re all things which would spur economic activity and employment. And they are all things that, politically, go completely against the agenda of the Democrats and the President. And, apparently, they go unspoken by his so-called Council of Economic Advisers.

The people are poorly served when politics seeps into every layer of an administration. Political survival becomes the foremost priority. Those whose job it is to credibly and ethically serve a president and thereby the people, fail in their duty when they become mere propaganda tools of an agenda. When the “advise”, for instance, of an economic panel is driven by politics and a desire to support an agenda rather than by a real desire to serve the best interests of the country, they fail in the inherent duty their position demands and even worse, they fail public’s trust. Being a credible adviser doesn’t mean always saying yes to the agenda, something this present bunch could apparently afford to learn and learn quickly.

~McQ

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4 Responses to Harsh Words For Politicized Economic Advisers

  • Excellent post.  Makes my blood boil at how these “economic advisers” are blatantly spewing this propaganda.  Man!  I would love to hear some real truth for a change!

  • Advisers ?  No, more like cheerleaders.
    I wonder if they can do a full split ?

  • I suggest that part of the problem is that economics (on a macro scale, anyway) is not a science.  Hence, you can apparently ask ten economists their opinion on something and get eleven different answers!  It may be that Romer genuinely believes at least part of what she’s written, though I suggest that, if she does, it’s rather like the rooster believing that the sun comes up because he crows.

    That being said, there is no question but that politics plays far too large a role in policy decisions.  Hence, the dithering on A-stan as Imeme struggled with might and main to determine a course of action that would be most palatable at home; the presence of Axelrod (apparently) in national security meetings; the phony measurements such as jobs “created or saved”; and, above all, the reflexive need to look back and blame everything on Bush.