Economic Advisers to the '08 Candidates

NYT's Louis Uchitelle details to whom the candidates are turning for economic advice. Most of the names will be familiar: Rubin, Sperling, Lindsay. To the econ majors among you eager to know whom your textbook authors are supporting, we find out that Harvard's Greg Mankiw advises Mitt Romney, while David and Christina Romer of UC Berkeley speak exclusively to Barack Obama (take note Reedies who have survived Macro Theory. Your beloved Romer Lounge resides firmly in the Obama camp).

Uchitelle's most notable (if unsurprising) finding is that most liberal professional economists are skeptical of the increasingly populist Edwards campaign. Despite admiration for certain of Edwards' stances (such as his vocal support for closing the hedge-fund/private equity tax loophole), the absence of credentialed academics among Edwards' circle troubles me. He evidently consults on economic matters chiefly with Leo J. Hindery, a cable-television entrpreneur turned private equity guy. More disturbing, Edwards also listens to Clyde V. Prestowitz of the Economic Strategy Institute, whose views on international trade Paul Krugman sharply criticized over a decade ago.

The Congressional battle over the Peru free trade agreement once again exposed the deep rifts over economic policy within the Democratic party. To mediate these disputes, we need a President who gets advice from the best the economics profession has to offer. At least in his circle of advisers for the primaries, Edwards is failing that test.

Though I'm too lazy the summarize the entire argument, Edwards' choice of Hindery and Prestowitz gives new salience to Paul Krugman's famous distinction between professional economists and what he terms "policy entrepreneurs" (e.g. Arthur Laffer, John Kenneth Galbraith, Robert Reich, Lester Thurow). Usually without academic training, policy entrepreneurs address contemporary economic problems for a general audience, but without the theoretical or empirical rigor of professional economists. They thus end up peddling simplistic solutions (tax cuts always good; government should intervene more to protect "high-value added" industries) to complex problems. For Krugman's classic formulation of the issue, see pages 10-15 of Peddling Prosperity.

For anyone wondering what economists actually say to political candidates seeking their counsel, see Alan Blinder's interview with Charlie Rose (Uchitelle lists Blinder as yet unaffiliated, though in the interview he mentions talking to Obama).