help wanted
Source Eubulides
Date 05/11/29/21:19

November 27, 2005
Economic View
Help Wanted: Academic Economists, Pro-Bush

IT'S no secret that hurricanes and wars have swamped the economic
agenda that George W. Bush planned for his second term. In the
commotion, however, one fact has gone largely unnoticed: much of
Washington's expert economic team has disappeared.

The chairmanship of the Council of Economic Advisers will soon be
vacant, and two spots on the Federal Reserve Board that were recently
filled by academic economists already are. There is no assistant
secretary of the Treasury for tax policy, and the director's chair at
the Congressional Budget Office, currently occupied by Douglas J.
Holtz-Eakin, will soon be empty, too.

The White House and Congress need as many as five academic economists
of high caliber, and it's not obvious where they will come from. The
Republican Party may be facing something of a shallow bench.

"Bush's reputation in at least the academic community is about as low
as you can imagine," said William A. Niskanen, who was a member of the
council during President Ronald Reagan's first term and is now
chairman of the Cato Institute, a libertarian research group. "A lot
of people would not be willing to give up a good tenured position for
a position in the White House."

Back in 2003, the choice of N. Gregory Mankiw, a Harvard professor, to
head the council initially provoked some wonderment from economists.
He had condemned supporters of some Reagan-era tax cuts as "charlatans
and cranks" in the first edition of his basic economics textbook, and
he had suggested replacing part of the income tax with higher taxes on
gasoline - a nonstarter in this White House. But it's possible that
the administration had few other options.

"It has been true, typically speaking, that Republican administrations
have found it harder to find senior, more prominent academic
economists for the C.E.A. members and chairman than have Democratic
administrations," said Michael L. Mussa, a senior fellow at the
Institute for International Economics, a nonpartisan research group in
Washington, who was a member of the council during President Reagan's
second term.

Mr. Mussa explained that the problem was partly one of
specializations. "In the economics profession, on the microeconomic
and regulatory side, there you find a substantial number of
Republicans," he said, "but macroeconomists tend to lean a bit more to
the Democratic side, on average."

And politics do matter for the appointments. "If you have written
publicly in strong opposition to the current administration, they will
be less likely to be interested in you," said Kristin J. Forbes, a
veteran of the council who is now an associate professor at the Sloan
School of Management at the Massachusetts Institute of Technology. "On
the Council of Economic Advisers, the priority is a very good
economist who supports most of the president's economic policies."

The same is likely to be true for the positions at the Treasury, the
Fed and the Congressional Budget Office. Two of the three spots being
vacated by academic economists - Ben S. Bernanke and Edward M.
Gramlich at the Fed, and Mr. Holtz-Eakin at the budget office - could
well be filled with more of the same, Mr. Mussa said. (Mr. Bernanke is
expected to become the Fed chairman; Mr. Gramlich has returned to the
academic world, and Mr. Holtz-Eakin will join the Council on Foreign
Relations.) Mr. Mussa added, however, that the economist at the budget
office should have experience in policy and management.

That's something that many academics lack. "Generally, economists are
not very slick," said Alicia H. Munnell, a professor of management
sciences at Boston College who served on the Council of Economic
Advisers when Bill Clinton was president and spent years working in
the Federal Reserve system.

Economists may not want to be political, either, she added. The reason
has to do with incentives. "Everybody wants to go back into academia
and be respected, so you don't want to say anything too foolish that
people are going to laugh at you afterward," Professor Munnell

Professor Forbes recounted that she and her colleagues on the council
had pledged never to support policies that they didn't believe in
themselves. Nevertheless, the role of the council's chair can take on
a decidedly political tilt. That much was clear when Professor Mankiw,
the last chairman to serve for more than a few months, appeared before
the Joint Economic Committee of Congress in February of last year.

At times Professor Mankiw, who has returned to Harvard, sounded more
like Scott McClellan, the White House press secretary, than an
economic adviser. "The president is very focused on putting people
back to work, at creating jobs," he said. "The president has said that
he wants to make the tax cuts permanent. He believes that is important
for economic growth."

Once he even caught himself, but the result ended up the same: "The
president has - we've worked with Congress in the past to extend
unemployment benefits. The president will continue with Congress on
that issue."

Quite a few economists might have a hard time acting as the
president's mouthpiece today. Plenty of academics, even some who have
supported Republicans in the past, have condemned the White House's
current policies. In particular, the enormous federal deficit has
elicited ire from both left and right.

"There are a number of Republicans, both the right-wingers and the
moderates, who are very uncomfortable about the deficits, and
particularly about the spending that we saw in the first four years,"
Mr. Mussa said.

Dismay about the war in Iraq could also prompt many academics to turn
down the White House on principle, Mr. Niskanen said.

One hint that the labor pool is drying up may be in the ages of some
recent appointees. Professor Forbes was only 33 when she joined the
council in 2003. Katherine Baicker and Matthew J. Slaughter, two
academics confirmed as members this month by the Senate, are 34 and
36, respectively. Before taking up their new posts, both were
associate professors, as Ms. Forbes is now - not full professors, like
the vast majority of their predecessors.

Mr. Niskanen suggested that this change could stem from a perceived
drop in the prestige of the council. "Bush has centralized policy
decision-making much more than any president in years," he said. "The
Council of Economic Advisers has been somewhat bypassed."

Mr. Niskanen said that there were now fewer meetings between members
of the council and members of the president's cabinet than there were
during his term. The council's offices have even been moved to a
building farther from the White House.

ALL of these tensions may have resulted in a sort of Catch-22. The
president's inability to move forward with much of his second-term
economic agenda - dealing with Social Security, the tax system,
immigration and tort rules - may have dulled economists' eagerness to
work with him. Yet he may need them in order to start the wheels

"John Snow has talked about turning the tax commission report into
legislation," Mr. Niskanen said of the Treasury secretary, "but he
does not have the skills on board to do that."

Professor Forbes, who also spent time at the Treasury, said that
working in Washington demanded heavy sacrifices and large commitments
of time. Her colleague there, Harvey S. Rosen of Princeton, added that
spouses were often unwilling to move for short-term stints.

But Professor Munnell praised the experience as "extraordinary,"
adding that it also had a tendency to change the outlook of academic
economists: "Once you taste the real world, it's really hard to ignore

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