President Obama could have sent an exciting message to the business community last week by choosing, as his top economic guru, someone with a deep understanding of how the private sector works.
The president is, of course, entitled to seek advice from anyone he wants. Any president wants to lean on somebody he trusts and respects. In announcing the appointment at a press conference Friday, Obama called Goolsbee “one of the finest economists in the country,” and said he had complete confidence in Goolsbee’s ability to do the job.
What troubles me is the suspicion that if the two men simply traded places – if it were Obama’s job to advise Goolsbee on economic matters – the president would give the same advice he can expect to get from Goolsbee. Rather than opening the president’s mind to new ideas and alternative approaches, or even just presenting contrasting opinions in terms the president can readily understand, Goolsbee can be counted upon to reinforce the chief executive’s existing beliefs and biases.
The two have a longstanding and close professional relationship. Goolsbee was Obama’s economic spokesman in the 2008 presidential campaign, and has known him since his 2004 run for the U.S. Senate. Although they didn’t meet there, the two men overlapped in their times teaching at the University of Chicago, from which Goolsbee is currently on leave. Though the university is better known for its conservative economists, Goolsbee himself is considered a liberal.
And Goolsbee already is a member of the CEA. This means his promotion to chair the council will not require another round of congressional confirmation, which the administration probably sees as a bonus. Jack Lew is still awaiting confirmation as Obama’s budget director to replace Peter Orszag, who left the post in July.
The Obama economic team is stuffed with academics – like Goolsbee, Lawrence Summers and Christina Romer, the UC-Berkeley economist whom Goolsbee will replace as head of the CEA – and by technocrats, like Treasury Secretary Timothy Geithner. The president’s own professional experience seems to make him most comfortable with people from that milieu.
Experts with a private-industry background are conspicuously absent at the administration’s high levels. This may account for the president’s unfortunate tendency to diagnose “greed” and other evils in those who disagree with him and for his apparently genuinely surprise when business executives respond less than enthusiastically to his initiatives, including but not limited to the health care overhaul.
Of course, most private economists work for financial firms, which may be one reason the president shuns them. After years of demonizing “Wall Street” and blaming that ancient New York right-of-way, together with Republicans, for all the country’s ills, Obama may lack the desire or the political courage to let the enemy’s camel get a nose inside the administration’s economic tent.
Whatever his reasons, Obama has signaled that he plans to forge ahead with his current approach by selecting Goolsbee. As Obama himself said in his recent speech in Ohio, the country should “keep moving forward with policies that are slowly pulling us out.”
And, in an election year in which he and the president never seem to agree on anything, House Minority Leader John Boehner, R-Ohio, said much the same thing when he panned the Goolsbee nomination. “Unfortunately, the appointment of Austan Goolsbee to be the president’s chief economist represents a commitment to more of the same failed ’stimulus’ policies,” the would-be House speaker said Friday.
The president’s selection of Goolsbee is business as usual in Washington. That’s too bad. A lot of us in the business community were hoping for a change.
Larry M. Elkin, CPA, CFP®, president of Palisades Hudson Financial Group a fee-only financial planning firm headquartered in Scarsdale, NY. The firm offers estate planning, insurance consulting, trust planning, cross-border planning, business valuation, family office and business management, executive financial planning, and tax services. Its sister firm, Palisades Hudson Asset Management, is an independent investment advisor with about $950 million under management. Branch offices are in Atlanta and Ft. Lauderdale. Website: www.palisadeshudson.com.