Arnold Kling  

Economists and Influence

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Richard Green asks why economists do not have more influence at the White House. His answer:


economists have poor social skills

I do not think that is the issue at all. There is diversity among economists, and there are plenty who do have social skills.

I think that it is this White House where economists have little influence, and for that I blame this President. Economists were much more helpful during the Carter Administration (Alfred Kahn on deregulation) and the Clinton Administration. Under this President, the economic stimulus proposal was outsourced to Congressional leaders, with disastrous results. The Secretary of Energy was given a blank check to spend on picking winners, with disastrous results.

Worst of all, the Administration walked away from the Bowles-Simpson deficit reduction proposals. I doubt that you can find an economist anywhere on the spectrum from Blinder to Mankiw who thinks that throwing Bowles-Simpson under the bus was the right decision for the country.

The question to ask is not how economists can acquire better social skills but how we ended up with a President with so little appreciation of the role that economists can play in providing policy advice. More generally, one has to ask how did we end up with a President so little administrative ability and such poor management instincts.

My answer is that the nomination process has become more random. We have more primaries and more media events. As of about 1960, winning a party nomination took management skills. You had to negotiate with party leaders. You needed a highly organized effort to capture delegates. (Prior to 1960, the party leaders basically picked the nominee. Dwight Eisenhower did not need any management skills at all to win the nomination, but presumably he was picked in part for those skills.)

Today, you do not need an organization to run a Presidential campaign. If you did, instead of Newt Gingrich emerging as a front-runner, he would be out of the race. I say this not to demean Mr. Gingrich, but just to point out that in an earlier era his strategy of focusing on the media events known as "debates" would not have worked.

It is possible today to become President without having any idea how to set up effective processes for making and implementing decisions. That does not mean that a President will necessarily lack those skills. It seems to me that President Clinton maintained effective processes. He used his economic team well enough. But I expected the current President to be roughly similar, and I was wrong.

UPDATE: James Hamilton adds the Keystone Pipeline to the list of questionable decisions. I would add the decision to scorn Wyden-Ryan on Medicare reform. Once upon a time, President Obama claimed he was open to new ideas on entitlements.


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COMMENTS (22 to date)
Mike Rulle writes:

Perhaps it is true that President Obama lacks skills "to set up effective processes for making and implementing decisions". Many liberals probably agree. But ideology trumps process in importance. It seemed pretty clear that Obama's ideology was as left as anyone since McGovern. Admittedly, the Bush administration made it somewhat easier for Obama to appear less radical than he is. So many became enamored with the idea that Obama was extremely smart, intelligent and someone who "could figure things out". He may well be that--if I were an extreme left wing person, it is possible I would like his "processes".

My major point----it was obvious what he believed in because he told us. Yet the intelligentsia developed a willful blind spot regarding his ideology. I am surprised people are surprised.

Curt writes:

It seems to me that this post is as much about disagreement with decision outcomes as it is about 'poor process and management.'

My sense during the campaign was that team Obama did have pretty strong organizational skills along with a strategy that was executed just well enough to out-maneuver Hilary Clinton.

There's a long way to go yet for 2012, and I suspect the eventual winner will have shown a lot more organizational and management skills than Gongrich has thus far. But I do agree that the way the media landscape has been evolving does seem to indicate that there are ways to get plenty of attention without a lot of organized help.

Jack writes:

"Worst of all, the Administration walked away from the Bowles-Simpson deficit reduction proposals. I doubt that you can find an economist anywhere on the spectrum from Blinder to Mankiw who thinks that throwing Bowles-Simpson under the bus was the right decision for the country."

Weren't Krugman and Thoma quite critical of the plan?

Further, not sure I agree with your assessment of the role of management in campaign strategy. My understanding is that Obama ran a rather brilliant campaign (or at least his advisors, who he brought to the White House, did). David Plouffe and David Axelrod engineered two very smart strategies: 1.) they adopted Howard Dean's plan and capitalized on the Internet to build grassroots support and a base of small donations that helped overcome a candidate with far more name recognition and mainstream support; 2.) more important, focused on winning primaries with the most delegates rather than popular support. That still requires managing campaigns within those states.

Newt's initial bump in the polls is likely a mirage. On the other hand, Ron Paul's strength in Iowa is likely at least partially attributable to the strong campaign he's running there.

@Mike: Most liberals I know (including me) are pretty disappointed in Obama. Most would not consider him "radical" at all.

Vangel writes:

I doubt that you can find an economist anywhere on the spectrum from Blinder to Mankiw who thinks that throwing Bowles-Simpson under the bus was the right decision for the country.

I assume that you are joking. What the US does not need is more of the same big-government political games that kept kicking the can down the road. Why not just do the right thing and cut spending by the $1 trillion that Ron Paul proposes? Stop wasting money trying to defend Europe, Japan, and Korea, and stop trying to repeat the Soviet error in Afghanistan. Get rid of the costly regulatory burden that keeps American businesses buried in useless paperwork and provide incentives to those with good ideas by letting them pursue their goals in an unhampered marketplace.

Mark Brady writes:

Mike Rulle writes,

"It seemed pretty clear that Obama's ideology was as left as anyone since McGovern."

Phooey, with all due respect. And I don't write as a left-liberal, but as a libertarian.

Jonathan Bechtel writes:

Arnold,

Usually I find your reasoning very clear, but here I don't follow.

IIRC, one of Obama's biggest strength's was that he was so wonkish and interested in research. Wasn't he praised for assembling his super-team of advisors, and weren't most of them economists?

I also find your laments about the role of economists in the policy process puzzling. You're the guy that, more than anyone else, passes doubt on the benefits of technocratic expertise.

wd40 writes:

Larry Summers, an economist who understands the role of markets, had a very influential role in Obama's economic policy choices. More generally, Obama is not going to override his economic advisors' recommendations for strengthening the economy because the better the economic conditions, the more likely Obama will be re-elected. Arnold's post and some of the comments are not even close to being on the mark.

david writes:

Arnold,

I disagree. Almost everyone thinks this president has a better foreign policy record than domestic policy record. It is unlikely that he has greater natural abilities in foreign policy. Instead the answer is that he is more guided by liberal ideology on domestic policy and more likely to be practical when it comes to foreign policy.

John from Oceanside writes:

Since the Employment Act of 1946, presidents have been more apt to ignore economists than otherwise, which has both good and bad externalities. President Obama however has taken great advantage of his economists, as long as they were on the proper side of Maynard. As far as Mr. Green's comment goes, can you name another economist that has more personality and charisma than Austan Goolsbee? And his successor, Alan Krueger, proved quite useful to the president in the cars for clunkers debacle.

Chris Koresko writes:

Arnold Kling: The question to ask is not how economists can acquire better social skills but how we ended up with a President with so little appreciation of the role that economists can play in providing policy advice.

My impression is a little different: I've seen lots of instances of this administration and its allies in Congress using economics for support rather than enlightenment. There were claims that raising the minimum wage would stimulate the economy. Ditto unemployment benefits, green-energy subsidies, and even regulation that forces companies to bear new costs. All of this strikes me as absurd, but I'm pretty sure those claims made by politicians came originally from real economists. The politicians just pick and choose which economists to believe to gain intellectual support for their political positions.

As in many other areas, this kind of misbehavior is not original with the Obama administration, but it seems to have been elevated to a whole new level.

Arnold Kling writes:

Chris,
Part of the trick is being able to tell a mainstream economist from a fringe head case. Clinton spurned Paul Krugman for Laura Tyson, much to the former's public chagrin. But Krugman will give idiosyncratic advice, not mainstream advice.

Jonathan,
Economists are the second-worst people to listen to for advice. All the other technocrats are tied.

Henry writes:

Gingrich is a front-runner? He's at 13% on Intrade currently, well behind Romney's 65%, despite still having a polling lead. A clear sign that the bettors think that organisation matters.

Are you sure that an economist qua economist has anything special to say (other than to highlight the economic costs and benefits/constraints) about whether the US government should do any of those things you mention? At the point at which he/she offers policy advice, he/she has stopped being an economist and is now offering advice based on his/her philosophic or ethical views - and I'm pretty sure most economists have engaged in very little reflection on those matters (present company here at this blog excepted of course). Now perhaps you are only claiming that the d-makers should listen a lot more to the costs/benefits and constraint arguments that could be proferred by economists speaking as experts. I'm fine with that - but a lot of our policy choices have a lot more to do with "wrong" ethical/philosophical positions than a failure to talk to economists.

Peter H writes:

Re: Ike,

He did also have the credential of administering the allied forces in WWII. I can't think of a more difficult administrative challenge, and in fact, it was probably harder than what he faced as President.

Michael writes:

"Under this President, the economic stimulus proposal was outsourced to Congressional leaders, with disastrous results."

Seems difficult to blame this on Obama. I am confused by how libertarians want decentralized power, yet lament a president who outsources decisions to the at least slightly more locally elected officials in congress. Shouldn't we applaud this approach?

AJ writes:

Obama is not just ignorant of economics, he has no grasp of the private sector at all. His ideology leaves no room for any perspectives that would be brought by anything approaching a mainstream economics. Any economic perspective would be like hearing a foreign language.

Also, economists tend to see how the private sector could succeed in accomplishing many useful social goals and want to shape and enhance that process. Leninist leftist types are not interested in this at all and want the destruction of private institutions.

AJ

Andrew writes:

I am confused by how libertarians want decentralized power, yet lament a president who outsources decisions to the at least slightly more locally elected officials in congress.

That might be a more decentralized decision making process, but it's hardly decentralized power - you're still talking about something at the national level. Now if each state were responsible for developing and implementing their own economic stimulus proposals then you'd have an example of decentralized power.

Zach Pruckowski writes:

I've got to agree with "Grover Cleveland" here: Either the argument is "Obama is categorically refusing to listen to the advice of economic experts, and no economic experts agree with him" (which is trivially refuted) or "I don't agree with the guys giving Obama advice or agreeing with him" (which is a political disagreement you're dressing up in economics clothes).

Further, I'm very skeptical of making an assertion about what's required to win a nominating contest based on evidence from before any voting has taken place. The fact that disorganized candidates experience a bubble means little until we know how the caucus (and the rest of the nomination) plays out.

The idea that Obama was a disorganized also-ran until his Iowa win ignores all pre-caucus polling data. Further, his organization and management pretty clearly contributed to his victory in the 4-5 month contest (it's certainly not the case that some brief polling bump happened to win him Iowa and then he got the nomination via momentum).

Gepap writes:

Maybe economists have so little pull with this admin. because they have performed so horribly in the last few years and their predictions have been relatively awful or of no use.

I mean, how is expansionary austerity going?

Also, as others have said, there isn't unanimity in the intelligence of Simpson-Bowles or Wyden-Ryan, so claiming they are clearly good ideas is false because many very smart people think they are badly designed plans.

Lord writes:

His practicality may be the problem. As he rushed to grab the center, the right retreated to extremism. Instead of gaining bipartisanship he sharpened the divide as a result. He didn't realize the right needs the left to define itself.

Mr. Econotarian writes:

Regarding Obama and economists, what about listening to Jared Bernstein and Christina Romer claim that the stimulus would keep unemployment under 8%?

Qrat writes:

He is correct. If economists had better social skills they wouldn't be blamed for the failure of policymakers ignoring them. Though, I'm not sure if moving the blame to another party with poorer social skills would make for a better world :)

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