Something about Obama attracts New D’s, GOP’s, Broderites, Indies, Perotistas, Reagan D’s and Libertarians alike. Is it his big table? His promise to turn the page? His post-racial posture? Is it his cologne?
Or is it Austan Goolsbee?
Oh, and DLC senior economist.
Huh? Whuzzat? Yes, that DLC.
June 19, 2006
Austan Goolsbee Joins DLC and PPI as Senior Economist
WASHINGTON, D.C. — The Democratic Leadership Council (DLC) and the Progressive Policy Institute (PPI) are pleased to announce that Austan Goolsbee, the Robert P. Gwinn Professor of Economics at the University of Chicago, has agreed to become Senior Economist to both organizations.
You hadn’t heard that, had you? That’s what a dog whistle is for. In distant corners of the political grid, they hear the pied piper’s dog code loud and clear … and they do come a-runnin’.
Read on as we crack the code.
And yes, it’s that U. of Chicago — bastion of neoliberal (free market) political economics, skunkworks behind the Old Right’s counterrevolution against the intellectual decadence of FDR’s New Deal, and Obama’s primary academic stomping ground.
As one conservative Yale alum testifies:
… voters who usually lean Republican should take a second look at Obama … Although some of his centrist economic prescriptions may disenchant liberals who distrust the benefits of globalization, Goolsbee said economic data indicate that free trade leads to higher wages.
George Will digs Goolsbee. What’s not to like … if you’re George F. Will?
The liberal’s liberal economist Paul Krugman? Not so much. Goolsbee is the unnamed advisor Krugman refers to when he tabs Obama’s stimulus plan “disreputable”. [There's the Rosetta Pebble, BTW, to a code we'll break later.]
Enough about who Goolsbee is. What does Goolsbee think?
Goolsbee thinks single payer is a bad idea. He thinks Warren Buffett is just lucky. He thinks globalization is no biggie. He thinks subprime lending gimmicks made the market more perfect. And he gives Dubya high marks on trade, taxes, job creation … but an “Incomplete” on Social Security.
Onward to the Big Picture framework questions of progressive policy and politics.
How do we remedy lopsided distribution of wealth and income? To Goolsbee, the main answers are education, education, and educational opportunity.
Obama’s vision, as focused by Goolsbee’s lenses, includes “democratizing capitalism”. I guess that means we’ll all be rich, a few decades after the rich pull everybody else on board into the investor class. (Heard this somewhere before, have you?)
Much as I sympathize with Goolsbee on some points of theory and stylistic emphasis, this is just wrong. No doubt an educated workforce grows the economy pie in toto. No doubt certain members of an educated class find the biggest slices on their plates. But in a positionally-competitive casino economy keyed to disproportionate reward for a limited number of key men (in franchises, networks and lineages), the system won’t divvy up rewards in natural open market-theoretic shares just because everybody moves up the skills ladder.
This doesn’t level the playing field – it just ratchets the game up to a higher level of difficulty. Same social order of advantage and disadvantage, with fatter sheep for the same ravening wolves.
How do we fix public education? With incentive systems, of course. Merit pay for schoolteachers.
On the plus side, Goolsbee does favor public investments in education and infrastructure. (These are the highest-return investments we know how to make, public or private.) Push the money out there, let private actors rearrange it optimally.
How do we regulate global corporate enterprise? Much as we regulate US corporations, i.e., not much. Strained through the academic economist’s revealed preference for market outcomes, regulations are just a rats-nests of departures from the optimality of market outcomes. Outcome-directive levers of policy — mandates, prohibitions and other regulations — are bad. Incentives and public investments are good, as mitigations to market insecurities.
How do we reform health care? With a mandate-free version of Romney – Edwards – Clinton – Schwarzenegger insurance mandates.
Can we tax the rich? [In a global mobile economy, that's really the question of the age.] Here’s a plus. Goolsbee argues that marginal tax rates on top-share incomes may not be as all-out destructive as Chicago School orthodoxy assumes. Still, the Obama camp is reluctant to venture into progressive taxation much beyond ending the Bush cuts.
We should use a market-based strategy that gradually reduces harmful emissions in the most economical way. John McCain and Joe Lieberman are continuing to build support for legislation based on this approach,
Long on incentives, short on mandates.
How do we treat Social Security? Well, here’s a puzzle. Barack Obama’s position (as outlined by Goolsbee) is a dead ringer for Hillary Clinton’s position (as scathingly criticized by Barack Obama).
Whence this worldview? A Financial Times profile finds Goolsbee “almost wholly lacking in political experience”. This may account for his adherence to the textbook economist’s faith in smooth curves and theoretical equilibria, and disdain for the disruptive hand of government.
He’d rather have the invisible giants tilt the landscape so that desirable outcomes flow naturally downhill and accumulate in convenient catch-basins.
Contact with real politics — real constituents coming to you with real problems — would have tended to take the gloss off whatever smooth shiny vision he brought to the party … or to steer him toward a comfort zone in the other party, serving the Haves and sighing “can’t be helped” to the plight of the Have-Nots.
Breaking the code: What does all this tell us about Barack Obama’s vision of a low-conflict New Politics, and its strange attraction across the political spectrum? Here, it gets interesting.
Obama sincerely believes he’s on to something. He hasn’t told us what it is yet, or how it would work, or how he knows it would work, but he believes it’s possible in principle to satisfy all sides of today’s major divisions of interest.
Apparently he is convinced that much of the conflict evident in today’s politics is inessential … derivative … superfluous. Where does he get that idea? Perhaps he’s informed by the siren’s call of naive economics and market idealism. If regulations were largely unnecessary, if imbalances were largely self-correcting, if economic growth itself were the path to economic justice … then we could enrich the deserving Have-Nots without all those disagreeable takings from the powerful Haves.
There’s a parallel here to presidential epochs past. Running for office, Reagan really thought he could give everyone a thirty percent tax cut, increase tax revenues, build a 600-ship Navy and a missile shield in space, and fund it by eliminating “ two words: fraud and waste“.
A closer parallel: Running for office, George W. Bush really thought he could give American conservatives their desired freedom from taxes and regulation, but also free them from the pangs of stricken conscience at the misfortune of others.
[Don't kid yourself. Few conservatives are indifferent to hungry kids or grannies freezing in the streets, even if it's not their kids or their grannies. They just don't know how to solve this problem without morphing into the despised -- and economically inconvenient -- liberals.]
Thus was born “compassionate conservatism“. The advantaged could sleep soundly knowing that their very selfishness paved the road to riches for the disadvantages.
Yeah, it was a crock — but so many wanted to believe, and so few asked the hard questions.
Now, with America beset by the legacies of these shared daydreams, who will ask the hard questions?
And who will respond to the beguiling whistle, and fall in line with the doggie parade?