Perhaps Paul Krugman's popular writings have had a strong treatment effect causing Republican economists to hide or change stripes. Perhaps economists are jockeying to join President Clinton's "Economic Dream Team" in early 2009. Today the New York Times points out an interesting fact. The Bush Administration is finding that the "academic bench" is short. It is having trouble recruiting excellent senior economists to join its team.
As a graduate of the University of Chicago's PHD program in economics, I had the opportunity to meet and work with some brilliant conservative thinkers. Unlike many of their cambridge counterparts, it never crossed their minds to join any Administration. I would guess that the typical "Republican" academic economist is a libertarian who may not agree with all of President George W. Bush's social policies or current fiscal policies. This sharply reduces the pool of possible candidates for the President to select from.
From reading the New York Times, I have the sense that the CEA is not currently that important a place in the current administration. This perception, even if it is not true, would also tend to dissuade people from signing up.
Stanford University has been a major pipeline sending strong economists to Republican Administrations. In recent years, the Stanford faculty has turned to more "pure theory" topics and its faculty has aged. I would guess that both of these facts also contribute to the "scarcity problem".
Finally, academic economists are well paid and I would guess that many leading Republican academics consult. These self-interested researchers would face a tradeoff. If they "serve their country now", will this be intellectually satisfying and could this raise one's ex-post consulting fee? I would like to know the answer to this question but I have no idea.
November 27, 2005
Help Wanted: Academic Economists, Pro-Bush
By DANIEL ALTMAN
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 explained.
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 moving.
"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 it."